Calculating project cash flows and NPV pappys Potato has come up with a new product, the potato pet (they are freeze-dried to last longer). Pappys paid $120,000 for a marketing survey to determine the viability of the product. It is felt that Potato pet will generate sales of $915000 per year. The fixed costs associated with this will be $235000 per year, and variable costs will amount to 20 percent of sales. The equipment necessary for the production of the potato pet will cost $890000 and will be depreciated in a straight-line manner for the four years of the product life (as with fads, it is felt the sales will end quickly). This is the only initial cost for the production. The tax rate is 23 percent and the required return is 13 percent. Calculate the payback period, NPV and IRR.

Please answer in excel and show the formula work as well. Thanks