Hearty Goodness Inc. manufactures a line of health foods and cereals. The company's management is considering the development of a new line of muesli. Use the information below to compute the Free cash flows and net present value for this proposed venture and advise management if it is wise to proceed. - New capital equipment will require an investment of $25 million - An addition to working capital of $11 million will be required - Sales are expected to be 1.4 million units per year - Each unit sells for $9.80 - Each unit has a variable cost of $2.40 - Fixed costs are $900,000 per year - To ensure the new product meets certain health standards, especially the minimisation of contamination risks from allergens, the company will commit to an ongoing monitoring program if the project goes ahead. This program will cost $500,000 per year. - The capital equipment will be depreciated straight-line-to-zero - All working capital is returned at the end of the project - The project has a life of 6 years - The corporate taxation rate is 30% and the discount rate is 17%