- We assume that the company you selected is considering a new project. The project has 8 years' life. This project requires initial investment of $195 million to purchase land, construct building, and purchase equipment, and $15 million for shipping & installation fee. The fixed assets (Total of 195+15= $210 M) fall in the 7-year MACRS class. The salvage value of fixed assets is $38 million. The number of units of the new product expected to be sold in the first year is 880,000 and expected to grow at annual growth rate of 9%. The sales price is $266 per unit and the variable cost is $179 per unit in the first year, but they should be adjusted accordingly based on the estimated annualized inflation rate of 2.8%. The required net operating working capital (NOWC) foe each year is 15% of sales for that year. The company is in the 21% tax bracket. The project is assumed to have the same risk as the corporation you have chosen, so you should use the WACC you obtained from prior steps as the discount rate. Compute the depreciation basis and annual depreciation of the new project. (Please refer to table of 11A-2, page 496 for 16th edition). - Estimate annual cash flows of the project for all the 8 years. - Draw a time line of the cash flows.