1. (5 Points). Hammond Industries (HI) develops a new product line that has an initial investment of $750,000. The new product is expected to generate annual operating cash flows of $200,000 per year for 5 years. HI's hurdle rate is 6.9%. HI's financial manager computes the internal rate of return of the product line as 10.4%. A. Compute the NPV of the product line. B. Compute the terminal value of the product line. C. HI invests in any project that will have a positive NPV. Explain how an increase in the hurdle rate would impact the capital budgeting decision. D. Explain how sensitivity analysis would help HI make a more complete capital budgeting decision. E. Define the terminal value of a project