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The JD Corporation is considering a new three-year expansion project that requires an initial fixed asset investment of $4,000. The fixed asset will be depreciated straight-line to zero over its five-year tax life, after which time it will be worthless. The fixed asset will be resold for $2,000 at the end of the project. The project requires an initial investment in net working capital of $300, which will be recouped at project end. The project is estimated to generate $2,500 in annual sales, with costs of $1,000. Assume the tax rate is 40 percent and the required return on the project is 8 percent. 1. (10 points) Calculate free cash flows for the expansion project. EBIT Taxes on operating profit Net operating profit after taxes (NOPAT) Add back depreciation Operating cash flow Investment in fixed assets Net salvage value 2. (4 points) Compute NPV. NPV = 3. (4 points) Compute IRR. IRR= (5 points) Determine whether you accept the above project or not. You have to show NPV and IRR rules you use for your