In the problems below, you can use a market risk premium of 5.5% 4. 5. 1. You have been given the following information on a project: It has a five-year lifetime. The initial investment in the project will be $25 million, and the investment will be depreciated straight line, down to a salvage value of $10 million at the end of the fifth year. The revenues are expected to be $20 million next year and to grow 10% a year after that for the remaining four years. The cost of goods sold, excluding depreciation, is expected to be 50% of revenues. The tax rate is 40%. a. Estimate the pre-tax return on capital, by year and on average, for the project. b. Estimate the after-tax return on capital, by year and on average, for the project. c. If the firm faced a cost of capital of 12%, should it take on this project