Company is considering launching a product line extension - a "new and improved" version with enhanced product features and environmentally friendly packaging. Below are key estimates and assumptions associated with the project:

Project life (in years)	4
Initial cost of equipment	$ 2,300,000
Initial Increase in Inventory	$ 50,000
Initial Increase in accounts receivables	$120,000
Initial Increase in accounts payables	$ 30,000
Gross sales from the new product line in year 1	$ 1,500,000
Initial Units sold in year 1	500,000
Initial sales price per Unit	$3
Gross sales increase after year 1 (per year due to increased Units & Inflation)	7%
Operating costs excluding cost of launching (as a% of gross sales)	25%
Launch costs in year 1	$ 75,000
Market research cost prior to the start of the project	$ 60,000
Inflation estimate per year (impacts sales and costs)	3%
Weighted average cost of capital	12%
Marginal corporate income tax rate	35%

Net working capital will be 10% of sales starting year 1. The new equipment is depreciated on a straight line basis over the life of the project. It is estimated that the new product will result in cannibalization of existing sales by an amount of $75,000 per year. The new equipment is estimated to have a salvage value of $150,000 in 4 years.

Create a spreadsheet showing the base case scenario to calculate Payback, NPV, IRR, and MIRR, PI..

Are Economic Value Added (EVA) and ROIC metrics appropriate in this case?

Is the product line extension feasible; and, why or why not?