Sugar Land Company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by a MBA student. The production line would be set up in unused space (Market Value Zero) in Sugar Land' main plant. Total cost of the machine is $350,000. The machinery has an economic life of 4 years and will be depreciated using MACRS for 3-year property class. The machine will have a salvage value of $35,000 after 4 years. The new line will generate Sales of 1,750 units per year for 4 years and the variable cost per unit is $110 in the first year. Each unit can be sold for $210 in the first year. The sales price and variable cost are expected to increase by 3% per year due to inflation. Further, to handle the new line, the firm's net working capital would have to increase by $30,000 at time zero (No change in NWC in years 1 through 3 and the NWC will be recouped in year 4). The firm's tax rate is 40% and its weighted average cost of capital is 11%. a. What are the annual depreciation expenses for years 1 through 47 Year 1 Year 2 Year 3 Year 4 Depreciation b. Calculate the annual sales revenues and variable costs (other than depreciation), years 1 through 4. Year 1 Year 2 Year 3 Year 4 $ Total Sales $ Total Variable costs C. Estimate annual (Year 1 through 4) operating cash flows Year 1 Year 2 Year 3 Tot Sales Var. Cost Depreciation EBIT Taxes Net Income Depreciation OCF d. Estimate the after tax salvage cash flow- e. Estimate the net cash flow of this project Year 1 Year 2 Year 3 Year 4 Year Zero Net CF of the project f. Estimate the NPV, IRR, MIRR, and profitability Index of the project. (20 points)