Traid Winds$$ Corporation, a firm in the $30$ percent marginal tax bracket with a required rate of return or discount rate of $$percent$,$ is considering a new project. This project involves the introduction of a new product. The project is expected to last $5$ years and$$ then, because this is somewhat of a fad$$ product, it will be terminated. Given the following$$ information, LOADING...$,$ determine the free cash flows associated with the$$ project, the$$ project's net present$$ value, the profitability$$ index, and the internal rate of return. Apply the appropriate decision criteria.

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Part $1$

a$.$Determine the free cash flows associated with the project.

The FCF in year $0$ is $$$

$$

enter your response here. $($Round to the nearest$$ dollar.$)$ Use the simplified straight$-$line method over $5$ years. It is assumed that the plant and equipment will have no salvage value after $5$ years. $$14,400,000$

Shipping and installation costs: $$170,000$

Unit sales:

Year Units Sold

$185,000$

$2125,000$

$3125,000$

$495,000$

$585,000$

Sales price per unit: $$330/$unit in years $1$ through $4,$ $$280/$unit in year $5$

Variable cost per unit: $$180/$unit

Annual fixed costs: $$600,000$

Working$-$capital requirements: There will be an initial working capital requirement of $$210,000$ to get production started. For each year, the total investment in net working capital will be equal to $9$ percent of the dollar value of sales for that year. Thus, the investment in working capital will increase during years $1$ through $3,$ then decrease in year $4.$ Finally, all working capital is liquidated at the termination of the project at the end of year $5.$

The depreciation method: Use the simplified straight$-$line method over $5$ years. It is assumed that the plant and equipment will have no salvage value after $5$ years.