Please do not put the 875,000 in the income statement rather put it in the investment statement to get the right NPV

the seventh year, and then decline by 15% a year for the next three years, when the product will be terminated. b. Cost of goods sold will be 60% of sales. c. Advertising and general expenses will be $10,000 a year. d. Equipment will be purchased today for $1,250,000 and will be depreciated over the 10-year project using the straight-line method. Installation cost today is $25,000, and this is depreci- ated over five years, also on a straight-line basis. The equipment has no salvage value. Other initial costs (which are expensed, not depreciated) total $875,000. There is no investment tax credit. (i) Calculate net income and operating cash flow using a 35% tax rate. (ii) Find the net present value of the project using a 10% cost of capital. (iii) In an effort to adjust for inflation, the finance department has produced an alter- native estimate of cash flows. The product price will remain the same, but adver- tising and general expenses will grow by 5% a year from its initial level of $10,000. In addition, the cost of goods sold will grow by 20% a year from its ini- tial level of $600,000 until year 6, remain the same in year 7, and then decline by 15% a year through year 10. What is the project's net present value under these assumptions?4. To capitalize on consumers' concerns about healthful food, Specific Foods, Inc., is consider- ing a new cereal, Veggie Crisp, which contains small bits of cooked vegetables with bran flakes. As part of its cash flow analysis, the finance department has made the following fore- casts of demand and cost: a. Sales revenue for the first year will be $200,000 and will increase to $1,000,000 the next year. Revenue will then grow by 15% a year for the next four years, remain the same in