Arnold-inc. is considering a proposal to manufacture high-end protein bars used as food- supplements by body builders. The project requires use of an existing warehouse, which the firm acquired three years ago for $3 million and which it currently rents out for $123,000. Rental rates are not expected to change going forward. In addition to using the warehouse, the project requires an upfront investment into machinesand other equipment of $4 million. This investment can be fully depreciated straight-line over the next four years for tax purposes. However, Arnold Inc. expects to terminate the project at the end of four years and to sell the machines and equipment for $0.4 million. Finally, the project requires an investment into net working capital equal to 10% of predicted each year sales. Sales of protein bars are expected to be $4.5 million in the first year and to stay constant forfour years. Total manufacturing costs and operating expenses (excluding depreciation) are 60% of sales, and profits are taxed at 30%. Required (a) What are the free cash flows of the project? (b) If the required rate of return is 10%, what is the NPV of the project? Should the company make the investment? (c) Calculate the project's IRR. Should the company make the investment? (a) If these are mutually exclusive projects, how you should choose the project, and briefly explain the reasons. Note: Ignore the capital gain tax