Scenario 1 Star Company is considering production of a surface tablet with the following associated data: Expected annual revenues, $3,000,000. A projected product life cycle of five years. Equipment costs $3,200,000 with a salvage value of $400,000 after five years. Expected increase in working capital, $400,000 (recoverable at the end of five years). Annual cash operating expenses are estimated at $1,800,000. The required rate of return is 12 percent. Required: APPLY THE CONCEPTS 2. Using the estimated cash flows, calculate the NPV (round the discount factor to five decimal places and the present values to the nearest dollar): Please review the tab "PV Table" for the present values Year Cash Flow Discount Factor Present Value $3,600,000 1.00000 1 $1,200,000 0.89290 $1,200,000 0.79720 X $1,200,000 0.71180 X -$3,600,000 $1,071,429 X $956,633 X $854,136 $1,200,000 0.63550 X $762,622 X 5 $2,000,000 0.56740 X $1,134,854 X Net Present Value. $1,179,673 X