A study estimates that it is possible to develop a project to win a bidding process that will initially sell 20,000 tons of the product per year for two years at $1,000 per ton per year. for two years, twenty thousand tons of the product per year, at $1,000 per ton. 1,000 per ton. In year 3, sales increase to 25,000 tons at $1,100 each and in subsequent years the 25,000 tons are sold at $1,200 each. the 25 thousand tons are sold at $1,200 each. For a production volume of up to 20 thousand tons, investments are required for: Land $10 million Physical Works $ 25 million Machinery $15 million Start-up costs (Nominal Assets) $ 9 million To increase production capacity, additional machinery is required for $3 million, with an additional capacity of 5,000 tons. million and with an additional capacity of 5,000 tons per year. The unit manufacturing costs are: Labor $ 100 Materials $150 Indirect costs $50 For volumes of 25 thousand tons or more, a 10% discount is obtained on the purchase of materials. materials. Fixed manufacturing costs amount to $3,000,000, which increase by $500,000 at production of 25,000 tons or more. production of 25,000 tons or more. There is a sales commission of 3% on sales and fixed selling expenses of $500,000 per year. 500,000 per year. The administrative expenses are $1 million, which will increase by $500,000 starting in year 3, an amount that will be maintained annually until the end of the year. 3, an amount that will be maintained annually until the useful life of the project. Depreciation of fixed assets is straight-line over 10 years to residual value 0, and nominal assets are depreciated over 3 years. nominal assets are depreciated over 3 years. Management estimates a working capital requirement equivalent to six months of the total cost of the project, which involves disbursement in the first year. which implies disbursement in the first year. This investment is recovered, with the same value, in the 5th year. At the end of year 5, the project will have to be liquidated because the tendered contract expires. At that date, it is estimated that the land and the rest of the The land and the rest of the fixed assets are expected to be sold at book value at that date. The company is taxed at 10% and has estimated a cost of equity capital of 15%. Economic Evaluation of the project (Pure Project Flow) NPV and IRR are requested.