Project Cash Flows you are evaluating a project for the ultimate recreational tennis racket, guaranteed to correct that wimpy backhand. You estimate the sales price of the Ultimate to be $400 per unit and sales volume to be 1000 units in year 1; 1250 units in year 2; and 1325 units in year 3. The project has a three-year life. Variable costs amount to $225 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $165,000 in assets which can be depreciated using bonus depreciation. The actual market value of these assets at the end of year 3 is expected to be $35,000. NWC requirements at the beginning of each year will be approximately 20 percent of the projected sales during the coming year. The tax rate is 21 percent and the required return on the project is 10 percent. What will the cash flows for this project be? And compute the NPV and IRR Given a 10% cost capital, would you recommend pursuing the project