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. 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 o Year 1 Year 2 Year 3 Sales $ 0 $ 2489760 $ 2489760 - Cost of Goods Sold 0 909090 909090 2489760 $ 909090 1580670 $ 162906 Gross Profit $ 0 $ 1580670 $ 1580670 - Depreciation 0 279186 199386 EBIT $ 0 $ 1417764 $ 1301484 $ 1381284 Tax 297730 273312 290070 Incremental Earnings $ $ 1120034 $ 1028172 $ 1091214 + Depreciation 0 162906 279186 199386 - Incremental Working Capital - Capital Investment Incremental Free Cash Flow $ Enter any number in the edit fields and then click Check