Revenues generated by a new fad product are
| Year | Revenues |
| 1 | 60,000 |
| 2 | 40,000 |
| 3 | 30,000 |
| 4 | 10,000 |
| Thereafter | 0 |
Expenses are expected to be 30% of revenues, and working capital required in each year is expected to be 10% of revenues in the following year. The product requires an immediate investment of $81,000 in plant and equipment.
a). What is the inital investment in the product? Rememebr working capital.
b).If the plant and equipment are depreciated over 4 years to a slavage value of zero using straight-line depreciation, and the firm's tax rate is 20%, what are the project cash flows in each year? Assume the plant and equipment are worthless at the end of 4 years.
c). If the
d). What is the project
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