Operating cash flow $($growing each year; MACRS$).$ A company is considering a project with the following forecasted sales: first$-$year sales quantity of $50,000$ with an annual growth rate of $5\%$ over the next $5$ years.

$$ the sales price per unit is $$42\mathrm{.}00$ and will grow at $5\%$ per year.

$$ The production costs are expected to be $38\%$ of the current year$$s sales price.

$$ The manufacturing equipment to aid this project will have a total cost $($including installation$)$ of $$3,500,000.$

$$ It will be depreciated using MACRS and has a $5-$year MACRS life classification.

$$ Fixed costs are $$425,000$ per year. The firm has a tax rate of $25\%.$

$$ The project will entail an investment of $12\%$ of the first year$$s forecasted production costs for working capital, which will be recovered at the end of the $5-$year life.

$$ In addition, the equipment will be sold for $25\%$ of its initial cost when the project is terminated.

$1)$ What is the operating cash flow for this project over these $5$ years?

$2)$ If the firm uses a hurdle rate of $12\%$ for similar risk projects, should they go ahead with this venture? Why or why not?

$3)$ What is the IRR of the project $($investment in the manufacturing equipment plus NWC invested$)?$