Healthy Inc. is considering a proposal to manufacture premium protein bars for health-conscious customers. The project requires an upfront investment into machines and other equipment of $1.5 million. This investment can be fully depreciated straight-line over the next 4 years for tax 5P a g Course Coordinator: G M Wali Ullah Course: Business Finance 1 (CORPFIN 1002) purposes. Health Inc. expects to terminate the project at the end of four years and to sell the machines and equipment for $500,000. Finally, the project requires an initial investment into net working capital equal to 10% of predicted first-year sales, which is expected to be recouped by the time the project finishes. Sales of protein bars are expected to be $3.5 million in the first year and to stay constant for four years. Total manufacturing costs and operating expenses (excluding depreciation) are 60% of sales, and profits are taxed at 30%. A. What are the Incremental Operating Cash Flows (OCF) of the project? [9] B. If the cost of capital is 15%, what is the NPV of the project? [4] C. If the acceptable payback period set out by the board is 3 years, should the CEO accept this project? D. Explain why the CEO might prefer the payback period technique over the NPV to make the final decision? Do you support the CEO's decision to use the payback period in decision-making