You have been hired as a financial consultant for Crazy Inc. Apps (CIA), a publicly traded firm that is the leader in Apps for smartphones. The company is looking at setting up a new computer lab to produce the next generation of Apps. This will be a five-year project. The company bought some land three years ago; the value of the land today is $7.1 M. In five years, the after-tax value of the land will be $7.4 M. The company wants to build its new lab in this land. The cost of the building and equipment of the lab will be $40M. Here is some more info on CIA: CIA has decided to raise the funds needed to build the lab by issuing new shared of common stock, without any intermediary or underwriter. CIA's tax rate is 35%. The project requires $1,400,000 in initial net working capital investment to get operational. Calculate the project's initial Time 0 cash flow, taking into account all side effects. The new lab is somewhat riskier than a typical project for CIA, because it is a new untested idea. You should increase the discount rate of this project by 2% to account for the added risk. Calculate the appropriate discount rate to use when evaluating the project. The manufacturing plant has an eight-year tax life, and CIA uses straight-line depreciation. At the end of the project (that is, the end of Year 5), the building and equipment can be scrapped for $8.5M. What is the after-tax salvage value of this plant and equipment? The company will incur $7,9M in annual fixed costs. The plan is to sell 20 M Apps per year and sell them for $1 each. The variable production costs for each App are zero. What is the annual operating cash flow (OCF) from this project? CIA's comptroller is primarily interested in the impact of CIA's investments on the bottom line of reported accounting statements. What is the accounting break-even quantity of Apps sold for this project? Finally, CIA's president is a humble man with humble tastes. All he wants to know is the Apps project's IRR and NPV