You are now analyzing an investment opportunity to upgrad your factory. Your planning horizon is over 5 years. It has the following components. The investment: Project wil cost $12 million of investment. Of this $9 million can be depreciated straight line over 3 years to a salvage value of $3 million. You are confident that after 5 years you could sell the equipment for $ million. To get started you will also need $500,000 of initial working capital. The improvement: As a result of the project you model your EBIT will increase $4.1 million in year 1 and grow by 6.5% each year. The company expects to keep cost flat and increase sales and prices to realize the expected changes in EBIT over the 5 year project. Company data: Company's tax rate is 2.1%, company's discount rate is 11.5%. Risk free rate is 4%. The company has 2 million outstanding share at $85. The company has $5 million in bonds with a 7% coupon rate. questions: What is the formula for calculating the operating cash flow in a project? Calculate the operating cash flow for each of the 5 years? What is the formula for calculating the terminal cash flow in a project? What is the cash flow at t=5? What is the projects NPV