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

Expenses are expected to be $40\%$ of revenues, and working capital required in each year is expected to be $10\%$ of

revenues in the following year. The product requires an immediate investment of $$53,000$ 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 $20\%,$ 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?