Use the following information to answer the next 3 questions: Cheese \& Cake Factory is looking at a project with the following forecasted sales: first-year sales quantity of 35,000 with an aunual growth rate of 5% over the next 5 years. The sales price per unit is $40 and will grow at 3% per year. The prodiction costs are expected to be 50% of the current year's sales price. The manuficturing equipment to aid this project will have a total cost (including installation) of $1,000,000. It will be depreciated using MACRS and has a seven-year MACRS life classification (see attached table). Fixed costs are $300,000 per year. The change in net operafing working capital is $10.000 and will be recovered at the end of year 5 . Cheese \& Cake Factory has a tax rate of 40%. At the end of year 5 , the manufacturing equipment can be sold for $150,000 and the cost of capital for this project is 10% 9. What is the initial cash flow on this project? A. $1.010,000 B. $35,000 C. $1,000,000 D. $2,650,000 10. What are the operating cash flows for years one and two? A. $257,100&$212,150 B. $297,160&$372,190 C. $1,000,000&$10,000 D. $142,900&$244,900 11. What is the termination cash flow (everything except the operational cash flow) at the end of year 5 ? A. $189,240 B. $10,000 C. $223,100 D. 529,240 12. Which of the statements below is TRUE of the payback period method? A. It ignores the cash flow after the initial outflow bas been recovered. B. It is biased against projects with early-tem payouts. C. It incorporates time-value-of-money principles. D. It focuses on cash flows after the initial outflow has been recovered