The firm is planning on starting a new operation which will last for about seven years. The initial cash injection will be $35,000. The revenues for the seven years are expected to be:

1)13,000.00

2)14,000.00

3)17,000.00

4)18,000.00

5)20,000.00

6)25,000.00

7)20,000.00

The variable costs are 35% The tax rate remains at 25% Fixed costs are $2,500 per year The company expects a recovery on concluding operations of $12,000. This amount is taxable. Your second task : You will need to use an Excel spread sheet for this. Please cut and paste the final answers to a Word document. a) Work out a simplified capital budget using the above data b) Determine the NPV using the WACC as determined in part 1. c) Determine the IRR based on the capital budget you worked out. Finally, what is your recommendation to the owner of this business regarding the project. Should he investigate it further, or should he abandon the idea? Why or why not?