We assume that the company you selected is considering a new project. The project has 11 years'life. This project requires initial investment of $320 million to purchase equipment, and $15 million for shipping & installation fee. The fixed assets fall in the 10-year MACRS class. The salvage value of the fixed assets is 10% of the purchase price (including the shipping & installation fee). The number of units of the new product expected to be sold in the first year is 1,200,000 and the expected annual growth rate is 7.5%. The sales price is $150 per unit and the variable cost is $110 per unit in the first year, but they should be adjusted accordingly based on the estimated annualized inflation rate of 2.0%. The required net operating working capital (NOWC) is 11% of sales.

- Compute the depreciation basis and annual depreciation of the new project.

- Estimate annual cash flows for the 11 years.

- Draw a time line of the cash flows.