As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The equipment would cost $55,000, plus $10,000 for installation. Annual sales would be 4,000 units at a price of $50 per cartridge, and the project’s life would be 3 years. Current assets would increase by $5,000 and payables by $3,000. At the end of 3 years, the equipment could be sold for $10,000. Depreciation would be based on the MACRS 3-year class, so the applicable rates would be 33%, 45%, 15%, and 7%. Variable costs would be 70% of sales revenues; fixed costs excluding depreciation would be $30,000 per year; the marginal tax rate is 40%; and the corporate WACC is 11%.

A. What is the required investment, the year 0 project cash flow?B. What are the annual deprecation charges?C. What are the projects annual net cash flows?