Aunt Sallys Sauces Inc., is considering expansion into a new line of all-natural, cholesterol-free, sodium-free, fat-free, low-calorie tomato sauces. Sally has paid $50,000 for a marketing study which indicates that the new product line would have sales of $650,000 per year for the next six years. Manufacturing plant and equipment would cost $500,000, and will be depreciated using the following annual depreciation rates: 0.2, 0.32, 0.1920, 0.1152, 0.1152, 0.0576. The fixed assets will have no market value at the end of six years. Annual fixed costs are projected at $80,000 and variable costs are projected at 60% of sales. Net operating working capital requirements are $75,000 for the six-year life of the project; the outlay for working capital will be recovered at the end of six years. Aunt Sallys tax rate is 34% and the firm requires a 16% return. a. Compute the annual depreciation and the ending book value of the fixed assets. b. Prepare pro forma income statements for the project for years 1 through 6. c. Compute operating cash flow (NOPAT) for the project for years 1 through 6. d. Compute total projected cash flows for years 0 through 6 for the project. e. Compute the NPV and IRR for the new product line.