Question 1: The Washington Lumber Mill is considering whether the purchase of equipment to produce plywood from sawdust makes long-term economic sense. The CFO for the mill has collected the following information and asks you for your help in deciding whether to invest in the project or not. Cost of the investment Working capital required Expected tax rate Investment Useful Life Salvage Value Incremental revenue per year Incremental expenses per year $ 615,000 $ 59,000 25% 5 years $ 50,000 $ 300,000 $ 110,000 (A) Compute the annual operating cash flow from the investment. Be sure to consider revenues, expenses, depreciation and taxes. Yearly Revenue Yearly Expenses Yearly Depreciation Expected Annual EBIT Estimated Taxes Annual Operating Cash Flow (B) What is the payback time for the investment? Total Investment Annual Cash Flow Payback Time years (C) What is the Rol for the investment? Total Cash Flow Total Investment Return on Investment (D) If the mill uses a 10% discount rate what will the NPV of the investment be? Discount Rate Year 0 1 2 3 4 5 Investment Working Capital Operating Cash Flow Salvage Total Cash Flow Discounted Cash Flow Net Present Value (E) Considering all of the calculations you have done so far advise the mill on whether to make the investment or not. Make sure to discuss the strengths and weaknesses of each investment metric