Problem 3.1. A company is evaluating a new 5-year project. The project will result in sales of $300,000 each year for the next 5 years. The costs of production will be $200,000 each year. The project requires an initial purchase of equipment worth $250,000. The equipment will be depreciated to zero using the straight line method over its life of five years. The equipment will be sold at a price of $30,000 at the end of five years. The project also requires net working capital of $30,000 for the first year. After that the net working capital requirement falls to $25,000 for years 2 to 5. Finally, no net working capital is needed in year 6. The projections are based on a market research study conducted by a consulting firm for which the company has already paid $6,000 to the consulting firm. The corporate tax rate is 20% and the discount rate for the project is 12%. Assume all cash flows for a year (including net working capital changes) occur at the end of year. What is the net present value of the project? If the firm has 100,000 shares, how does taking the project affect a shares value (round the impact to cents)? Prepare a table or use another method to show your calculation. Please show ALL workings.