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

Expenses are expected to be $50\%$ 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 $$60,000$ in plant and equipment.

Required:

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

b$.$ If the plant and equipment are depreciated over $4$ years to a salvage value of zero using straight$-$line depreciation, and the firm's

tax rate is $40\%,$ what are the project cash flows in each year?

c$.$ If the opportunity cost of capital is $12\%,$ what is project NPV$?$

d$.$ What is project IRR?