Webmasters.com has developed a powerful new server that would be used for corporations' Internet activities. It would cost $12 million at Year 0 to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to 9% of the year's projected sales, for example, NWC, = 9%(Sales,). The firm believes it could sell 1,000 units per year. The servers would sell for $25,000 per unit, and Webmasters believes that variable costs would amount to $18,750 per unit. After Year 1, the sales price and variable costs will increase at the inflation rate of 2%. The company's nonvariable costs would be $1 million at Year 1 and also would increase at the 2% inflation rate. The server project would have a life of 4 years. If the project is undertaken, it must be continued for the entire 4 years. The equipment would be depreciated over a 5-year period, using MACRS rates. The estimated market value of the equipment at the end of the project's 4-year life is $500,000. Webmasters' federal-plus-state tax rate is 25%. Its cost of capital is 10% for average-risk projects, defined as projects with a coefficient of variation of NPV between 0.8 and 1.2. Low-risk projects are evaluated with a WACC of 8%, and high-risk projects at 13%. Also, the project's returns are expected to be highly correlated with returns on the firm's other assets. a. Develop a spreadsheet model, and use it to find the project's NPV, IRR, and payback. Webmasters.com has developed a powerful new server that would be used for corporations' Internet activities. It would cost $12 million at Year 0 to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to 9% of the year's projected sales, for example, NWC, = 9%(Sales,). The firm believes it could sell 1,000 units per year. The servers would sell for $25,000 per unit, and Webmasters believes that variable costs would amount to $18,750 per unit. After Year 1, the sales price and variable costs will increase at the inflation rate of 2%. The company's nonvariable costs would be $1 million at Year 1 and also would increase at the 2% inflation rate. The server project would have a life of 4 years. If the project is undertaken, it must be continued for the entire 4 years. The equipment would be depreciated over a 5-year period, using MACRS rates. The estimated market value of the equipment at the end of the project's 4-year life is $500,000. Webmasters' federal-plus-state tax rate is 25%. Its cost of capital is 10% for average-risk projects, defined as projects with a coefficient of variation of NPV between 0.8 and 1.2. Low-risk projects are evaluated with a WACC of 8%, and high-risk projects at 13%. Also, the project's returns are expected to be highly correlated with returns on the firm's other assets. a. Develop a spreadsheet model, and use it to find the project's NPV, IRR, and payback