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The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $ 4 0 . The unit cost of the giftware is

The following table presents sales forecasts for Golden Gelt Giftware. The unit price is $40. The unit cost of the giftware is $25.Year Unit Sales124,800244,000328,00045,000 Thereafter 0 It is expected that net working capital will amount to 20% of sales in the following year. For example, the store will need an initial (Year 0) investment in working capital of .20\times 24,800\times $40= $198,400. Plant and equipment necessary to establish the giftware business will require an additional investment of $270,000. This investment will depreciate on the MACRS schedule over 3 years. After 4 years, the equipment will have an economic and book value of zero. The firms tax rate is 30%. The discount rate is 20%. Use the MACRS depreciation schedule.

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