P12-14 (similar to) TAI (Related to Checkpoint 12.1) (Calculating project cash flows and NPV) You are considering expanding your product line that current consists of skateboards to include gas powered skateboards and you feel you can sell 11,000 of these per year for 10 years after which time this project is expected to shut down with solar powered skateboards taking over). The gas skateboards would sell for $110 each with variable costs of $50 for each one produced, and annual foxed costs associated with production would be $190,000. In addition, there would be a $1.400.000 initial expendre associated with the purchase of new production equipment It is assumed that this initial expenditure will be depreciated using the simplified straight-ime method down to zero over 10 years. The project will also require a one time initial investment of $30.000 in net working capital associated with inventory and this working capital investment will be recovered when the project is shut down. Finally, assume that the firm's marginal tax rates 30 percent a. What is the initial cash outlay associated with this project? b. What are the annual net cash flows associated with this project for years through 97 c. What is the terminal cash flow in year 10 (that is what is the tree cash flow in year 10 plus an additional cash flows associated with son of the project)? d. What is the project's NPV given a required rate of return of 9 percent? recinctissh Rod to the nearest dollar)