Free Cash Flow and NPV Problem: The managers of YETI are deciding whether to create a new solar powered cup that will both produce heat and chill your drink. The preliminary R&D for this project costed $$350,000$ and investment to update their current manufacturing equipment to produce these cups will cost $$2,000,000.$ The manufacturing updates will be depreciated using a five$-$year MACRS life and management expects to sell the updated manufacturing equipment at the end of year $5$ for a salvage value of $$150,000.$ Projected sales in annual units for the next year will be $20,000$ and are expect to grow at $10\%$ per year. The price of the solar powered cup will be set at $$69\mathrm{.}99.$ In order to produce these cups, YETI incurs a variable cost of $$23\mathrm{.}21$ per cup and has an annual fixed cost increase of $$450,000.$ Net working capital initially increases by $$200,000$ but decreases by $$60,000$ per year until it is back at its original value at the end of year $5.$ Assuming a discount rate of $13\%$ and a tax rate of $35\%,$ Fill out the following fields and determine whether management accept or reject this project based upon the NPV decision model. Use references and NPV$/$IRR formulas in your computation.

R&D Cost $$350,000$

Manufacturing Update $$2,000,000$

Units Sold in first year $20,000$

Price per unit $$69\mathrm{.}99$

Cost per unit $$23\mathrm{.}21$

Annual Fixed Cost $$450,000$

Tax Rate $35\%$

Discount Rate $13\%$