11-14. (Comprehensive problem) Metal Winds Ltd is considering a new project that involves the introduction of a new technology for developing small-sized wind mills. Given the uncertain future of this particular technology, it has been decided to base the analysis on a duration of 5 years, and to assume no final value of the equipment. Metal Winds Ltd expects to earn an 8 percent rate of return, and to pay a 28 percent tax rate. Given the following information, determine the free cash flows associated with the project, the project's net present value, the profitability index, and the internal rate of return. Apply the appropriate decision criteria. CostofnewplantandequipmentShippingandinstallationcosts18,800,000200,000 UNIT SALES Sales price per unit 300 /unit in years 1 through 4,250 /unit in year 5 Variable cost per unit 170 /unit Annual fixed costs 900,000 per year in years 15 Working-capital requirements There will be an initial working-capital requirement of 200,000 just to get production started. For each year, the total investment in net working capital will be equal to 10 percent of the dollar value of sales for that year, and will be made at the beginning of the year. Thus, the investment in working capital will increase during years 1 and 2, then decrease in year 4. Finally, all working capital is liquidated at the termination of the project at the end of year 5 . Depreciation method Use the simplified straight-line method over 5 years. Assume that the plant and equipment will have no salvage value after 5 years