The expected cash flow forecasts of investment are listed in the table below. The investment has a 12% cost of capital and a 5-year holding period. The depreciation will be calculated using the straight-line method and ignoring salvage value.

Initial investment ($ thousands) 15,000

Salvage value ($ thousands) 2,500 Initial revenues ($ thousands) 15,000 Variable costs (% of revenues) 40.0% Initial fixed costs ($ thousands) 4,500 Inflation rate (%) 4.0% Discount rate (%) 10.0% Receivables (% of sales) 18.0% Inventory (% of next year's costs) 15.0% Tax rate (%) 21.0% Calculate: (a) Cash flows from working capital; (b) Cash flows from operating; (c) NPV of this investment; and (d) NPV of the investment, if the forecasted inflation rate changes from 4% to 8% and the discount rate changes from 10% to 14%.