Revenues generated by a new fad product are forecast as follows:

Year	Revenues
1	$ 45,000
2	40,000
3	30,000
4	20,000
Thereafter	0

Expenses are expected to be 40% of revenues, and working capital required in each year is expected to be 30% of revenues in the following year. The product requires an immediate investment of $50,000 in plant and equipment.

Required:

1. What is the initial investment in the product? Remember working capital.
2. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firms tax rate is 40%, what are the project cash flows in each year?
3. If the opportunity cost of capital is 15%, what is project NPV?
4. What is project IRR?