You must analyze a potential new product-a caulking compound that Cory Materials' R&D people developed for use in the residential construction industry. Cory's marketing manager thinks they can sell 115,000 tubes per year at a price of $3.25 each for 3 years, after which the product will be obsolete. The required equipment would cost $150,000, plus another $25,000 for shipping and installation. Current assetsceivables and inventories) would increase by $35,000, while current liabilities (accounts payable and accruals) would rise by $15,000. Variable cost per unit is $1.95, fixed costs be $70,000 per year, and fixed assets would be depreciated under MACRS with a 3-year life. [33%, 45%, 15%,7%), when production ceases after 3 years, the equipment should have a maket value of $15,000. Cory's tax rate is 40%, and it uses a 10% WACC for average-risk projects. a. Find the required Year 0 investment and the project's annual cash flows. Then calculate the project's NPV, IRR, MIRR, and payback. Assume at this point that the project is of average risk. Part 1. Key Input Data Equipment cost Installation cost Increase in current assets Equip. salvage value at end of 3 yrs Increase in payables and accruals Tax rate Unit sales WACC Sales price per unit Variable cost per unit (in dollars) Fixed costs Part 2. Depreciation and Amortization Schedule Years Accum'd 3 Deprn ear Initial Cost Equipment Depr % Each Year Equipment Depr Amount Ending Bk Val: Cost-Accum'd Deprn Part 3. Net Salvage Values, at End of Year 3 Estimated Market Value at End of Year 3 Equipment Book Value at End of Year 3 Expected Gain or Loss Taxes paid or tax credit Net cash flow from salvage