An Armenian dried fruit producing company has developed a new type of dried apricot that can be sold for $6 per box (real) and that is expected to have continuing popularity for many years. For this particular product the CFO has proposed that investment should be evaluated over a five-year time-horizon, even though sales would continue after the fifth year, on the grounds that cash flows after five years are too uncertain to be included in the evaluation. The variable and fixed costs are presented in current price terms/real/ and variable costs will be $2 per box and fixed costs are $100,000 per year. Forecast sales volume (boxes) are as follows: Year 1: 100,000 , year 2: 130,000 , year 3: 150,000, year 4: 160,000 , year 5: 130,000 Production of the dried apricots will require $100,000 in net working capital to start and thereafter additional net working capital investments each year equal to 10 percent of the projected sales increase for the following year. The equipment needed to begin production has an installed cost of $500,000. This could be depreciated for tax purposes straight-line over 8 years. However, it is expected to terminate the project at the end of five years and this equipment can be sold for about 40 percent of its acquisition cost. The average general level of inflation is expected to be 4% per year and selling price, variable costs and fixed costs would all experience inflation of this level. An Armenian company is in the 18 percent marginal tax bracket and uses a nominal after-tax cost of capital of 10% to appraise new investment projects. Requirements: Please calculate the nominal cash flows of the project for the five-year time-horizon; Calculate the NPV, IRR, Payback period, discounted payback and Profitability index for the project (Interpret the results); Advise on the acceptability of the proposed investment in product line.