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Project cash flow and NPV.The managers of Classic AutosIncorporated plan to manufacture classic Thunderbirds? (1957replicas). The necessary foundry equipment will cost a total of?$4,200,000 and will be depreciated using a? five-year MACRS?life,LOADING.... Projected sales in annual units for the next fiveyears are 290 per year. If the sales price is $25,000 per? car,variable costs are ?$16,000 per? car, and fixed costs are?$1,200,000 ?annually, what is the annual operating cash flow ifthe tax rate is 38?%? The equipment is sold for salvage for?$525,000 at the end of year five. What is the? after-tax cash flowof the? salvage? Net working capital increases by ?$575,000 at thebeginning of the project? (year 0) and is reduced back to itsoriginal level in the final year. What is the incremental cash flowof the? project? Using a discount rate of 12% for the? project,determine whether the project should be accepted or rejectedaccording to the NPV decision model.?First, what is the annual operating cash flow of the projectfor year? 1?MACRS Fixed Annual Expense Percentages by RecoveryClass???????????Year?3-Year?5-Year?7-Year?10-Year????1?33.33%?20.00%?14.29%?10.00%????2?44.45%?32.00%?24.49%?18.00%????3?14.81%?19.20%?17.49%?14.40%????4? 7.41%?11.52%?12.49%?11.52%????5?11.52%?8.93%?9.22%????6? 5.76%?8.93%?7.37%????7?8.93%?6.55%????8?4.45%?6.55%????9?6.55%??10?6.55%??11?3.28%