Your company has been doing well, reaching $1.05 million in earnings, and is considering launching a new product. Designing the new product has already cost $468,000. The company estimates that it will sell 791,000 units per year for $3.01 per unit and variable non-labor costs will be $1.01 per unit. Production will end after year 3. New equipment costing $1.04 million will be required. The equipment will be depreciated using 100% bonus depreciation under the 2017 TCJA. You think the equipment will be obsolete at the end of year 3 and plan to scrap it. Your current level of working capital is $301,000. The new product will require the working capital to increase to a level of $372,000 immediately, then to $407,000 in year 1, in year 2 the level will be $355,000, and finally in year 3 the level will return to $301,000. Your tax rate is 21%. The discount rate for this project is 10.4%. 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 (irrelevant). (Select from the drop-down menu.) According to the bonus depreciation schedule, depreciation in year 1 will be $. (Round to the nearest dollar.) Depreciation in years 2 and 3 will be $ (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 $ - Cost of Goods Sold $ $ Gross Profit A A A A $ $ $ $ $ $ - Depreciation $ EBIT $ $ - Tax Incremental Earnings + Depreciation - Incremental Working Capital $ $ $ $ $ $ $ $ $ $ $ $ A - Capital Investment Incremental Free Cash Flow TA $ The NPV of the project is $ (Round to the nearest dollar.)