QUESTION 2 (14 marks) (30 minutes) The following table summarizes sales forecasts for Stirling Corp. The unit price is $40. The unit cost is $25. In addition, annual fixed expenses are expected to be $35,000. Unit Sales 22,000 30,000 14,000 9,000 5,000 0 Year 1 2 3 4 5 Thereafter Stirling has developed a new improved water flow system that requires an additional investment of $425,000. Old equipment is the same asset class (25% CCA rate) can be sold for $25,000. After 5 years the asset will have a value of zero. The firm's tax rate is 35%. The net working capital requirement (including the initial working capital needed in year 0) is expected to be 25% of the following years sales. The company requires a 12% return on projects of this nature. REQUIRED: Calculate the net present value of the project to determine if the company should invest in this equipment. Show all calculations