(Calculating free cash flows​) You are considering newelliptical trainers and you feel you can sell 6,000 of these peryear for 5 years​ (after which time this project is expected toshut down when it is learned that being fit is​ unhealthy). Theelliptical trainers would sell for ​$1,000 each and have a variablecost of ​$500 each. The annual fixed costs associated withproduction would be ​$1,500,000. In​ addition, there would be a​$6,000,000 initial expenditure associated with the purchase of newproduction equipment. It is assumed that this initial expenditurewill be depreciated using the simplified​ straight-line method downto zero over 5 years. This project will also require a​ one-timeinitial investment of ​$1,100,000 in net working capital associatedwith​ inventory, and that working capital investment will berecovered when the project is shut down.​ Finally, assume that the​firm's marginal tax rate is 34 percent.

a. What is the initial outlay associated with this​ project?

b. What are the annual free cash flows associated with thisproject for years 1 through​ 4?

c. What is the terminal cash flow in year 5 ​(that is, what isthe free cash flow in year 5 plus any additional cash flowsassociated with the termination of the​ project)?

d. What is the ​project's NPV given a required rate of return of9 ​percent?