Weston clothing company is considering purchasing a new equipment to manufacture a new style of shirt, whose data are shown below. Revenues and other operating costs are expected to be constant over the projects 3-year life. However, this project would compete with other Westons products and would reduce their pre-tax annual cash flows by $5,000 each year. Moreover, the project requires networking Capital $15,000 every year (invested at the beginning of each year). The new equipment costs $100,000 and would be depreciated using MACRS rates (0.3333, 0.4445, 0.1481) and would have a pre-tax salvage value of $20,000.

WACC	10.0%
Pre-Tax cash slow reduction for other products	$5,000
Sales Revenues, each year for 3 years	$67,500
Required net working capital	$15,000
Annual operating costs (excl. deprec.) if new equipment is used	$10,000
Tax rate	25.0%
New equipment cost (Depreciable basis)	$100,000
New equipment MACRS deprec. rate	0.3333, 0.4445, 0.1481
New equipment pre-tax salvage value	$20,000

1. Shall we consider the cash flow reduction for other products in our investment decision?
2. What is the depreciation expenses of the new equipment each year?
3. What is the remaining Book value of the new equipment by the end of year 3? What is the capital gains tax we have to pay? What is the after-tax salvage value of the new equipment?
4. What is the net cash flow in year 0?
5. What is the net cash flow in Year 1?
6. What is the net cash flow in year 2?
7. What is the net cash flow in year 3?
8. What is the net present value of this project? Should you invest in this project?

Please show step by step and include formulas