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

year revenues

1 $40,000

2 30,000

3 20,000

4 5,000

thereafter 0

Expenses are expected to be 40% of revenues, and working capital required in each year is expected to be 20% of revenues in the following year. the product requires an immediate investment of $49,000 in plant and equipment.

required:

A. what is the initial investment in the product? Remember working capital.

B. if the plant and equipment are depreciataed over 4 years to a salvage value of zero using straight-line depreciation, and the firm's tax rate is 20%, what are the project cash flows in each year?assume the plant and equipment are worthless at the end of 4 years.

C. if the opportunity cost of capital is 10%, what is the projects NPV?

D. what is project IRR?