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7. (20 points) A project requires an initial fixed asset investment of $600,000, which will be depreciated straight-line to zero over the 6-year life of the project. The pretax salvage value of the fixed assets at the end of the project is estimated to be $50,000. Projected sales volume for each year of the project is shown below. The sale price is $50 per unit. A $30,000 initial investment in net working capital is required, and is recovered at the end of the project. Variable costs are $35 per unit, and fixed costs are $50,000 per year. The firm has a tax rate of 34%, and a required return on investment of 12% Year 2 6 4 14,000 Sales How many years of cash flow do you need to estimate for this project? Number of years to estimate cash flow- 10,000 11,000 12,000 13,000 15,000 a. years b. What is the initial investment? Initial investment$ What are the changes in net working capital for year 0 and at the end of the project? ANWC at year 0$ What are the operating cash flow for year 1 and for year 3? OCF at year 1$ c. ANWC at the end $ d. OCF at year 3$ What is the terminal cash flow? e. Terminal cash flow$ f. What is NPV of the project? NPV$ Should the project be accepte d? g. YES Circle one NO