Homework: Chapter 9 Homework (Copy) Question 11, P 9-28 (similar to) HW Score: 76.76%, 9.21 of 12 points O Points: 0 of 1 Part 1 of 6 Save Your company has been doing well, reaching $1.14 million in earnings, and is considering launching a new product. Designing the new product has already cost $543,000. The company estimates that it will sell 769,000 units per year for $3.04 per unit and variable non-labor costs will be $1.13 per unit. Production will end after year 3. New equipment costing $1.11 million will be required. The equipment will be depreciated to zero using the 7-year MACRS schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $299,000. The new product will require the working capital to increase to a level of $382,000 immediately, then to $396,000 in year 1, in year 2 the level will be $358,000, and finally in year 3 the level will return to $299,000. Your tax rate is 21%. The discount rate for this project is 10.1%. Do the capital budgeting analysis for this project and calculate its NPV. Note: Assume that the equipment is put into use in year 1. (...) Design already happened and is (irrelevant). (Select from the drop-down menu.) Sales - Cost of Goods Sold Gross Profit - Annual Cost - Depreciation EBIT - Tax Incremental Earnings + Depreciation - Incremental Working Capital - Opportunity Cost - Capital Investment Incremental Free Cash Flow