Jack in Pleasantville, NY is considering expanding his ice cream business and has gathered the following data: The special truck he needs costs $$90,000.$ He can depreciate the truck on a straight line basis over five years. At the end of five years, the project will terminate and he expects to sell the truck for $$23,000.$ Jack expects annual revenues to be $$120,000$ and operating expenses to be $$80,000$ per year. The business will require an initial investment in working capital of $$9,000$ and thereafter working capital requirements are expected to remain constant.

a$.$ If the marginal tax rate for this business is $40\%,$ calculate the operating cash flows for the project in each of years $1-5.(10$ points$).$

b$.$ Calculate the terminal cash flows, or the special cash flows that occur in the last year of the project $($year $5).(6$ points$)$

c$.$ Calculate the project cash flows, or the sum of initial investment, OCF, investment in working capital, and terminal cash flows $($if any$)$ in each of years $0-5.(10$ points$)$

d$.$ Calculate the NPV and IRR for the project based on the cash flows estimated in part $($c$)$ assuming that the discount rate is $22\%.(7$ points$)$