The Corporation, a firm in the 21 percent marginal tax bracket with a 15 percent required rate of return or cost of capital, is considering a new project. This is a growth project that involves the introduction of a new product. The project is expected to last 5 years and then be terminated. No salvage value at the end of year 5.

There will be an initial (Year zero) working capital requirement of $500,000 to start production. Then, for each year, the total investment in net working capital will equal 10 percent of the dollar value of sales for that year (WC requirement yr 1 = 10 % of Sales in yr 1).

For the depreciation method use the simplified straightline method over 5 years.

Cost of the new plant and equipment = $20,900,000.00

Shipping and installation = $300,000.00. Additional information is provided in the Table below.

Year	Unit Sold	Price	Variable cost/unit	Annual fixed Costs
1	100,000.00	$500	$260	$300,000.00
2	130,000.00	$500	$260	$300,000.00
3	160,000.00	$500	$260	$300,000.00
4	100,000.00	$500	$260	$300,000.00
5	60,000.00	$380	$260	$300,000.00

Given the above information, determine:

1. the free cash flows associated with the project,
2. the projects net present value, and the internal rate of return.