Chill Paddleboards, Inc. is considering a new six-year expansion project that will double the size of its manufacturing capabilities. It conducted an engineering study to determine how to be most efficient that had cost $15,000. that requires an initial fixed asset investment of $1,800,000, and an initial expenditure of working capital of $200,000. The fixed asset will be depreciated straight line to zero over its six-year tax life, after which time it will be worthless. The project is estimated to generate $800,000 in annual sales with costs of $400,000. The company's tax rate is 21%. The required rate of return on the project is 12%.

Answer the following questions, showing your work as to how you arrived at your answers

1. Are all cash flows relevant?
2. What is the initial cash flow for the project?
3. What is annual OCF for project?
4. What is the terminal cash flow for the project?
5. What is the project's NPV?
6. Should Chill Paddleboards invest? Why or why not?