ABC Corp is planning a project and you need to evaluate whether it is financially viable.
Project details are as follows - all numbers whether cash inflows, outflows, irrelevant or otherwise relevant are provided as absolute numbers
Project to manufacture and sell toothbrushes
Year	0	1	2	3	4	5
Initial investment	2,000,000.00
Number of units sold		50,000.00	100,000.00	200,000.00	200,000.00	200,000.00
Price per unit		5.00	6.00	8.00	8.00	8.00
Variable costs per unit		2.00	2.00	2.00	2.00	2.00
Fixed costs for the year		100,000.00	100,000.00	100,000.00	100,000.00	100,000.00
Average tax rate paid on earnings before tax	30%	30%	30%	30%	30%	30%
Depreciation is straight line to zero salvage over the five years
Project will be partly funded with fresh debt with the following terms
	5-year, $1 million of debt carrying an annual coupon rate of 4%.
	The entire $1 million will be repaid at the end of the five years.
Information about the firm (ABC)
Firm currently manufactures and sells packaged cookies
Current market value of equity	10,000,000.00
Current market value of debt	10,000,000.00
Current YTM on firm debt (i.e. cost of debt)	6%
Equity beta	1.2
Information about the environment
Risk free rate	4%
Expected return on the market index	9%
Information about competitors
Competitor 1: Manufactures and sells toothbrushes
Current market value of equity	30,000,000.00
Current market value of debt	10,000,000.00
Current YTM on firm debt (i.e. cost of debt)	6%
Equity beta	0.9
Competitor 2: Manufactures and sells cookies
Current market value of equity	40,000,000.00
Current market value of debt	10,000,000.00
Current YTM on firm debt (i.e. cost of debt)	6%
Equity beta	0.8
Competitor 3: Manufactures and sells a range of products including packaged foods, cosmetics, and personal hygiene products
Current market value of equity	10,000,000.00
Current market value of debt	10,000,000.00
Current YTM on firm debt (i.e. cost of debt)	6%
Equity beta	1.1
Question:
Calculate the relevant numbers and decide whether this project, if accepted, is expected to add value to the firm.
Show your calculations (formula or description in response) and provide explanations for any assumptions and choices made