The company is considering a new four year expansion project that requires an initial Investment in manufacturing machinery of 51,670,000. The machinery will be depreciated straight line to zero over its four-year tax life (depreciation rate is 25% per year). At the end of the project, the machinery can be sold for 26% of its original cost. The project requires an initial investment in net working capital of 5198,000, all of which will be recovered at the end of the project The project is estimated to generate $1,850,000 in annual sales, with annual costs of $1,038,000. The tax rate is 21 percent and the required return for the project is 16.4%. Instructions: 1. Calculate initial outlay (total cash flow in Year O). (5%) 2. Calculate after-tax salvage value. (5%) 3. Complete the pro forma and determine total cash flows for each year of project's life. (25%) Calculate the NPV of the project. (5%) 5. Calculate the IRR of the project. (5%) 6. Explain your decision whether you recommend to accept or reject the project. (5%) Year Sales Costs Depreciation EBIT Taxes Net income Operating Cash Flow V . The tax rate is 1 percent and the required Instructions: 1. Calculate initial outlay (total cash flow in Year O).(5%) 2. Calculate after-tax salvage value. (5%) 3. Complete the pro forma and determine total cash flows for each year of projects life. (25) 4. Calculate the NPV of the project. (5%) 5. Calculate the IRR of the project. (5%) Explain your decision whether you recommend to accept or reject the project. (5%) 6. Year Sales Costs Depreciation EBIT Taxes Net income Operating Cash Flow Capital spending Net Working Capital After-tax salvage value Total cash flow