Consider the following capital budgeting and cash flow estimation problem. You have developed a new energy drink that uses various vegetables. The drink is called V-DRINK. You have an existing building that you are using to produce V-DRINK. The building is fully depreciated. You determine a need to buy $400,000 in equipment. Shipping and installation are an additional $50,000. Additionally, you determine you will need to have $15,322 in inventory. The total initial outlay associated with the project is $465,322.

The equipment cost (equipment plus shipping and installation) can be depreciated at the rate of 21% in the first year. For the remaining 5 years (years 2-6) the depreciation will be equal to $30,000 per year. The amount of depreciation in year 1 is $94,500.

Based on some market research you expect to sell around 200,000 bottles of V-Drink a year at a wholesale price of $2.5. Operating costs (excluding depreciation) are expected to be 50% of the revenue. The firm's tax rate is 40%. The annual operating cash flow associated with this project in year 2 is $162,000. (Note you will need to factor in $30,000 in depreciation in year 2 from the prior question).

a) Compute the NPV, IRR, and payback. Also, complete an NPV profile associated with this project.