Use the following for questions 37 - 39: Microsoft is considering producing a new gaming system. This will be a four year project a. New equipment will cost $10,000,000 and will be fully depreciated on the straight-line basis to zero in five years. b. The project requires an initial investment in net working capital of $2,500,000 (which will be recaptured at the end of the project. c. Microsoft paid $3,000,000 last year for market research regarding the demand for a new gaming system. d. At the conclusion of the project in four years, the equipment can be sold for $2,500,000 e. The new gaming system will directly generate $12,000,000 in revenues each year of the project's life. f. In addition to the revenues in c., the new gaming system will also decrease existing Xbox revenues by $3,000,000 each year of the project's life. 8. The new project is estimated to have expenses of $5,000,000 each year of the project's life. h. The firm's tax rate is 20%. Question 37 11 nointi Question 37 (1 point) What is the initial investment (CFO) of this project? A/ Question 38 (1 point) What is the terminal cash flow (the last cash flow of the project not including the OCF)? 1 8 Question 39 (1 point) What are the after tax OCFs for the project in years 1 -4? 21 - 24