FuncoLand has developed a powerful new server that would be used for corporations Internet activities. It would cost $10 million at Year 0 to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to 10% of the years projected sales; for example, NWC0 = 10% (Sales1). The servers would sell for $24,000 per unit, and Web- masters believes that variable costs would amount to $17,500 per unit. After Year 1, the sales price and variable costs will increase at the inflation rate of 3%. The companys nonvariable costs would be $1 million at Year 1 and would increase with inflation. The server project would have a life of 4 years. If the project is undertaken, it must be continued for the entire 4 years. Also, the projects returns are expected to be highly correlated with returns on the firms other assets. The firm believes it could sell 1,000 units per year. The equipment would be depreciated over a 5-year period, using MACRS rates (see page 543). The estimated market value of the equipment at the end of the projects 4-year life is $500,000. FuncoLands federal-plus-state tax rate is 40%. Its cost of capital is 10%. Part 3: Cash Flow Estimation C) Calculate the sales revenues for each year. (10 Points) D) Calculate the net cash flow due to salvage. E) Calculate net cash flows for each year. Part 2: Capital Budgeting Analysis F) Calculate the NPV, IRR, MIRR, Payback and Discounted Payback.