Question: $ 4 , 0 0 0 , 0 0 0 Installation costs$ 1 0 0 , 0 0 0 Estimated unit sales in year 1

$4,000,000Installation costs$100,000Estimated unit sales in year 150,000Estimated unit sales in year 275,000Estimated unit sales in year 340,000Estimated sales price in year 1$150Estimated sales price in year 2$175Estimated sales price in year 3$160Variable cost per unit$120Annual fixed cost$50,000Additional working capital needed$435,000Depreciation method3 years straight-line method, no salvage valueTexas Rok's tax rate40%Texas Rok's cost of capital13%Tasks:Calculate operating cash flow and the change in net working capital.Determine the NPV and IRR of the project. Should the company accept or reject the project based on the NPV or IRR? Why?What is your final accept or reject decision? Why?What is the payback period for this project? Would this influence your decision to accept or reject?

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