Use the following information for the next seven questions: Cisco is considering the development of a wireless home networking appliance, called HomeNet. Based on market testing (which the company spent $250,000 on), 45,000 units are expected to be sold per year over the project's four-year life at an expected wholesale price of $550 per unit. Actual production will be outsourced at a cost of $450 per unit. $12 million of new equipment will be purchased and then depreciated using the straight-line method over a 30-year life. They expect the market value of the equipment to depreciate at 2% per year, at which point the company will sell the equipment. Cisco will pay $85,000 in interest expense on debt each year as a result of the project. In year 1, the firm must increase its inventory by $280,000, which will return to regular levels at the end of the project. The tax rate is 21%. The WACC for the company is 12%. Sales COGS GP Fixed EBITDA Dee EBIT TAX NI +Dep -CAPEX +NWC FCF 2,4,750,000 (20,250,000) 4,500,000 O 4,500,000 ( 400,000) 4,100,000 1861,000) 3,239,000 400,000 18. What is the free cash flow in Year 17 A) $3,291,850.00 B) $3,359,000.00 C) $3,919,000.00 D) $3,639,000.00 19. What is the free cash flow in Year 4? A) 814,567,050.16 B) $14,779,900.16 C) $14,447,050.16 D) $14.847,050.16 20. What is the NPV of the project? A) $5,925,832.77 B) $7,501,234.81 C) $6,234,106.31 D) $7,413,521.12