Week 10 - Chapter 9 2 Revenues generated by a new fad product are forecast as follows: Year 1 50 points Revenues $60,000 30,000 2e, 10,000 e 3 Thereafter Book Print Expenses are expected to be 50% of revenues, and working capital required in each year is expected to be 10% of revenues in the following year. The product requires an immediate investment of $54.000 in plant and equipment Required: a. What is the initial investment in the product? Remember working capital b. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firm's tax rate is 20%, what are the project cash flows in each year? Assume the plant and equipment are worthless at the end of 4 years c. If the opportunity cost of capital is 10%, what is the project's NPV? d. What is project IRR? References Complete this question by entering your answers in the tabs below. Req A ReqB Req Cand D c. If the opportunity cost of capital is 10%, what is the project's NPV? (A negative value should be indicated by a minus sign Do not round intermediate calculations. Round your answer to 2 decimal places.) d. What is project IRR? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) NPV IRR d 96