Gadgets, Inc. needs to allocate this year's capital expenditure budget to either construction of a new retail outlet or investment in product enhance- ment. The marketing department has prepared estimates of the predicted increase in sales resulting from each project. The required investment for each project is known and will be depreciated over five years. The required rate of return for both projects is identical to the firm's cost of capital of 15%. Their tax rate is 34%. New Retail Outlet 2 1 3 4 5 Year 0 Investment $1,300.00 Revenue Expenses $2,000.00 $2,100.00 $2,205.00 $2,315.25 $2,431.01 $1,100.00 $1,155.00 $1,212.75 $1,273.39 $1,337.06 Product Enhancement 2 3 4 5 Year 0 Investment $1,200.00 Revenue Expenses $1,500.00 $1,575.00 $1,653.75 $1,736.44 $1,823.26 $800.00 $840.00 $882.00 $926.10 $972.41 (All figures in thousands) 4.a Calculate net cash flows for each project 4.b Calculate the NPV of each project. Which project should you choose