of fishing rods for a limited time only. To do so, they must purchase new machinery for 1. (50 points) The Trout Fishing Company is considering whether to produce a ne $4.800,000. This machine will enable Trout to produce the new rods for 3 years. Projections indicate that sales of the new product will equal $4,500,000 for each of the next three years while incurring annual production costs of $1,800,000. the end of the project, they expect to have to pay $170,000 to remove the machinery from their They plan to depreciate the machinery straight-line to zero over the 3-year life of the project. At factory. If the company purchases the machine, this project will require an additional $100,000 in net working capital. The relevant tax rate is 21%. a. Calculate all the relevant cash flows for this project. (Solve your smaller problems we've talked about in class.) b. If their required rate of return is 13%, determine whether the firm should purchase the machine.