. 1. (14 points) Using the columnar paper on the next page, construct the annual cash flows and calculate the net present value and internal rate of return for a project with the given following information: Admin Selling Price Expenses* - % of Sales COGS Marketing $15 34.0% Year 1 2 3 4 Units Sold 6,500 9,000 8,600 3,500 $14 $13 73.0% 71.0% 68.0% 68.0% 24.0% 14.0% 10.0% Expense* $925 $850 $865 $880 $11 * All Expenses Above EXCLUDE Depreciation Working Capital: $600 initially (year 0); $400 (year 1): $200 (year 2) Working Capital: Full recovery in the final year. Initial Investment: $11,600 Salvage Value: $1,000 at the end of year 4 Tax Rate: 24.0% Cost of Capital: 10.0% Assume: (1) straight-line depreciation to zero: (2) full working capital recovery in year 4; and (3) any taxable losses can immediately be used to offset taxable income somewhere else in the company. Net Present Value: (Show 2 decimal places: $1,234.56) Internal Rate of Return: (Show 2 decimal places: 34.56%) USE WHOLES Year 0 Year 1 Year 2 Year 3 Year 4 Sales Cost of Goods Sold Marketing Expense Administrative Exp Depreciation Pretax Income Tax Expense After Tax Income After Tax Income Depreciation Working Cap Invest Capital Expenditure After Tax Sal Value Cash Flow PLEASE USE WHOLES 3