Page Industrial Systems (PIS) is thinking about expanding its facilities. In considering the expansion, PIS's finance staff has obtained the following information:

• The expansion will require the company to purchase today $5 million of equipment. The equipment has 5 years life and will be depreciated using MACRS.
• The expansion will require the company to increase its inventories by $350,000 and its accounts payable will rise by $100,000. It is expected that the Net Working Capital (NWC) to increase by 10% throughout the life of the equipment.
• The equipment is expected to have a salvage value of $100,000 at the end of five years.
• The company's operating costs, excluding depreciation, are expected to be 60 percent of the company's annual sales.
• The expansion will increase the company's sales to $3 million in the first year and then the sales will increase by an increment of $0.5 million a year thereafter.
• The company's tax rate is 40%.
• The cost of capital is 10 percent.

a. What is the Net Investment outlay?

b. What are the cash flows over the life of equipment?

c. What is the project's NPV?

PLEASE SHOW ALL WORK and FORMULAS if you use an excel spreadsheet.