Mark is expanding a new product to help with in the construction market. His marketing manager thinks the company can sell 
1
2
0
,
0
0
0
units per year at a price of $
3
.
7
5
each for 
3
years, after which the product will be obsolete. The purchase price of the required equipment, including shipping and installation costs, is $
1
5
0
,
0
0
0
,
and the equipment is eligible for 
1
0
0
%
bonus depreciation at the time of purchase. Current assets 
(
receivables and inventories
)
would increase by $
4
5
,
0
0
0
,
while curent liabilities 
(
accounts payable and accruals
)
would rise by $
2
0
,
0
0
0
.
 Variable cost per unit is $
1
.
9
5
,
and fixed costs would be $
7
0
,
0
0
0
per year. When production ceases after 
3
years, the equipment should have a market value of $
1
5
,
0
0
0
.
Marks tax rate is 
2
5
%
,
and it uses a 
1
0
%
WACC for a
.
 Find the required Year 
0
investment outlay after bonus depreciation is considered and the project’s annual cash flows.
 Then calculate the project’s NPV
,
IRR, MIRR, and payback. Assume at this point that the project is of average risk.
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