USE THE FOLLOWING INFORMATION TO CONSTRUCT PROJECT CASH FLOWS FOR THIS PROJECT. USE THE TEMPLATE BELOW. The Dune Buggy is a new children's toy product that your ToxCo management thinks will be a big hit with children due to the popularity of the new Dune movie. While they think the sale and profit potential will be enormous in the next few years, they believe that after 2026, the project will have no further value to the company and they will discontinue it. The start date for the project is December 31, 2022. It is expected to require capital investment of $80 million paid at this date. The company also incurred $5 million in test marketing expenses for the new product earlier in 2022. The ToxCo management believe that the project will generate substantial revenues of $200 million in 2023, $500 million in both 2024 and 2025, then its popularity will fade, generating only $100 million in its last year of operations. There is some disagreement between different ToxCo management teams: the managers of Star Buggies think the Dune Buggy will erode much of its sales and that as much as half of Dune Buggy's sales will be to customers who they would expect to buy Star Buggy products. Dune Buggy managers argue that if they don't capitalize on the Dune movie, then another competitor will. The production costs for manufacturing Dune Buggies will be 50% of revenues in each year. Marketing costs are expected to be lower than usual, because the sales force will be marketing the new product in the same channels as other products. The management team has forecast 10% of revenues as incremental marketing costs. They also forecast that General and Administrative Expenses are expected to be 20% of sales each year. None of the above expense categories include any depreciation expense. The $80 million up -front investment will be depreciated straight line for tax purposes over an eight-year useful life. Given the company will only operate the project for four years, assume they can sell these assets at the end of four years for $20 million. The new project will require net working capital at all times equal to 10% of next year's revenue. The company's tax rate is 22% and its cost of capital for this investment is 12%. Operating Revenues Cash Operating Expenses Depreciation Expense EBIT Taxes (22%) Net Operating Income Add back depreciation Minus net capital spending Minus chg in net working capital Project Cash Flow PV each cash flow NPV project 2022 2023 2024 2025 2026