a. What is the initial outlay associated with this project?

b. What is the annual free cash flow associated with this project in year 1?

What is the annual free cash flow associated with this project in year 2?

What is the annual free cash flow associated with this project in year 3?

What is the annual free cash flow associated with this project in year 4?

c. What is the terminal cash flow in year 5 (that is, what is the free cash flow in year 5 plus any additional cash flows associated with the termination of the project)?

d. What is the project's NPV given a required rate of return of 11 percent?

Based on the NPV criterion, should the project be accepted?

Based on the PI criterion, should the project be accepted?

What is the project's IRR?

Based on the IRR criterion, should the project be accepted?

(Comprehensive problem) Traid Winds Corporation, a firm in the 31 percent marginal tax bracket with a required rate of return or cost of capital of 11 percent, is considering a new project. This project involves the introduction of a new product. The project is expected to last 5 years and then, because this is somewhat of a fad product, be terminated. Given the information in the popup window, , 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