2. Project X involves a new type of graphite composition in-line skate wheel. We think we can sell 3,000 units per year at a price of $1,000 each. Variable costs will run about $400 per unit, and the product should have a four-year life. Fixed costs for the project will run $450,000 per year. Further, we will need to invest a total of $1,250,000 in manufacturing equipment. The required rate of return is 15 percent and the tax rate is 21 percent. b. This equipment is seven-year MACRS property for tax purposes. In four years, the equipment will be worth about half of what we paid for it. At the beginning of the project, we will have to invest $250,000 in net working capital. After that, net working capital requirements will be 15 percent of sales. All additional investments in net working capital will be recovered at the end of the project. What is the project's IRR? Should the project be accepted based on IRR? c. This equipment will be depreciated straight-line to zero over five years. In four years, the equipment will be worth about half of what we paid for it. At the beginning of the project, cash and cash equivalents will increase by $204,200, inventories will increase by $805,000, and accounts payable will increase by $320,200. All additional investments in net working capital will be recovered at the end of the project. What is the project's PI? Should the project be accepted based on PI