*Complete the problems in an Excel spreadsheet. Be sure to show your work to receive credit; no hard keys.

A firm is considering the product line currently consisted of scooters to include gas-powered scooters and it can sell 6,000 of these per year for 8 years; as the end of year 8, the project will be terminated. The gas-powered scooters would sell for SAR 3,000 each with variable cost of SAR 1,400 for each one produced, annual fixed cost associated with production would be SAR 2,600,000. In addition, that would be SAR 15,000,000 initial outlay for the purchase of new production equipment. It assumes the initial expenditure will be depreciated using the straight-line method over 8 years and no salvage value. This project requires a SAR 1,000,000 in net working capital associated with inventory and the additional working capital investment will be recovered after the project terminated. The firms corporate tax rate is 21%.

1. What is the initial outlay associated with this project?
2. What are the annual cash flows associated with this project for Years 1 through 8?
3. What is the terminal cash flow in Year 8?

What is the projects NPV with 9% required rate of return? Is it acceptable?