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(Related to Checkpoint 12.1) (Comprehensive problem-calculating project cash flows, NPV, PI, and IRR) Traid Winds Corporation, a firm in the 32 percent marginal tax bracket

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(Related to Checkpoint 12.1) (Comprehensive problem-calculating project cash flows, NPV, PI, and IRR) Traid Winds Corporation, a firm in the 32 percent marginal tax bracket with a required rate of return or discount rate of 13 percent, is considering a new project. This project involves the introduction of a new product. The project is expected to last 5 years and then because this is somewhat of a fad product, it will be terminated. Given the following information, determine the free cash flows associated with the project, the project's net present value, the profitability index, and the internal rate of return. Apply the appropriate decision criteria a. Determine the 0 Data Table - The FCF in year o X Cost of new plant and equipment Shipping and installation costs Unit sales $14,200,000 $220,000 Year Units Sold 80,000 125,000 125,000 90,000 80.000 Sales price per unit Variable cost per unit: Annual fixed costs Working-capital requirements. $320/unit in years 1 through 4, 5270/unit in year 5 $120/unit $750 000 There will be an initial working capital requirement of $180,000 to get production started. For each year the total investment in net working capital will be equal to 9 percent of the dollar value of sales for that year. Thus, the investment in working capital will increase during years 1 through 3, then decrease in year 4. Finally, all working capital is liquidated at the termination of the project at the end of year 5. Use the simplified straight-line method over 5 years. It is assumed that the plant and equipment will have no salvage value after 5 years The depreciation method

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