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

Year | Revenues

1 52,000

2 30,000

3 20,000

4 10,000

Thereafter 0

Expenses are expected to be 50% 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 $54,000 in plant and equipment.

a.What is the initial investment in the product? Remember working capital.

Initial Investment ___

b.If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firm's tax rate is 30%, what are the project cash flows in each year? Assume the plantand equipment are worthless at the end of 4 years.(Do not round intermediate calculations.)

Year | Cash Flow

1 ?

2 ?

3 ?

4 ?

c.If the opportunity cost of capital is 12%, what is the project's NPV?(A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

NPV ____

d.What is project IRR?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

IRR ____ %