Your company has been doing well, reaching $1. 14 million in earnings, and is considering launching a new product. Designing the new product has already cost $514,000. The company estimates that it will sell 819,000 units per year for $3.04 per unit and variable non-labor costs will be $1.11 per unit Production will end after year 3. New equipment costing $1.14 million will be required. The equipment will be depreciated to zero using the 7-year MACRS schedule. You plan to sell the equipment for book value at the end of year 3. Your current level of working capital is $305,000. The new product will require the working capital to increase to a level of $373,000 immediately, then to $390,000 in year 1, in year 2 the level will be $347,000, and finally in year 3 the level will return to $305,000. Your tax rate is 21%. The discount rate for this project is 10.1%. Do the capital budgeting analysis for this project and calculate its NPV Note: Assume that the equipment is put into use in year 1. Design already happened and is sunk (irrelevant). (Select from the drop-down menu.) According to the 7-year MACRS schedule, depreciation in year 1 will be $ 162906. (Round to the nearest dollar.) Depreciation in year 2 will be $ 279186. (Round to the nearest dollar.) Depreciation in year 3 will be $ 199386. (Round to the nearest dollar.) Complete the capital budgeting analysis for this project below: (Round to the nearest dollar.) Year 0 Year 1 Year 2 Year 3 Sales $ 0 $ 2489760 $ 2489760 $ 2489760 - Cost of Goods Sold 909090 909090 909090 Gross Profit $ 0 $ 1580670 $ 1580670 - Depreciation 0 1580670 $ 162906 1417764 $ 279186 199386 EBIT $ 0 $ 1301484 $ 273312 - Tax 297730 1381284 290070 1091214 199386 Incremental Earnings $ 0 $ 1120034 $ 1028172 $ + Depreciation 162906 279186 - Incremental Working Capital - Capital Investment Incremental Free Cash Flow $ $ $