We estimate unit sales from a new project as follows: Year Unit Sales 1 20,000 2 25,000 The product will be priced to sell at $50 each. The project will require $400,000 in net working capital to start. The NWC will be recovered at the end of the project. The variable cost per unit is $25, and total fixed costs are $10,000 per year. The equipment necessary to begin production will cost a total of $800,000. This equipment is assumed to depreciate according to a 2-year straight-line depreciation schedule. At the end of year 2, the equipment will be sold at $10,000. The corporate tax rate is 40%. (a) Calculate the annual cash flows for this project? (i.e., cash flows for year 0, year 1 and year 2) b) If the company's stock has an estimated beta (beta) of 2. The expected on the market is 10 % year and the risk-free rate is 4% year. The company is all-equity financed. you accept the project