Rose is considering a project which requires new equipment at a cost of $170,000. The equipment has a 3-year tax life and will be depreciated by the MACRS method. When the project closes down at the end of the third year, it is expected to sell for $50,000 before taxes. To launch the project new working capital of $30,000 is required; it is expected to be fully recovered at the end of the project's life. Project revenues of $115,000 and operating costs of $65,000 apart from depreciation are forecast. No inflation is expected. The firm faces a tax rate of 35% and the project has a discount rate of 11%. The MACRS rates for a 3-yr project are: 33.33%, 44.45%, 14.81%, and 7.41% for years 1 through 4, respectively. Answer the following questions in a new Excel tab, placing the company name at the top of the page. Use this information to answer the following five questions. Show all inputs and steps that you used to arrive at your answers.

Question 1: What is the initial outlay for the project?

Question 2: What is the operating cash flow for each year of the project?

Question 3: What is the amount of the terminal value (ie not including the operating cash flow) that occurs in the last year of the project life?

Question 4: What is the NPV and MIRR of the project?

Question 5: Would you accept the project? Explain?

Use Excel to show work.