Ir. Stark has decided that rather than purchase a distribution company, CHI will xpand one of its current manufacturing facilities to help meet the growing sports pparel demand in Canada, including the delivery of these products to the existing tore network he manufacturing facility currently operates at capacity, manufacturing 400,000 roducts annually that are ultimately sold in CHI stores within the fiscal year. The acility was purchased for $7,000,000 ten years ago. With the expansion, CHI will ave the ability to double the amount of products it can produce. The company xpects to increase production by 75% in the first year of expansion, followed by a teady annual 10% growth based only on incremental production (i.e., 10% growth xcluding the original facility capacity). The average apparel product manufactured will be sold for $30, and the price is expected to increase by inflation annually, which forecasted to be a steady 2% over the next ten years. he direct materials and direct labour used to manufacture these products are 23% nd 25% of sales, respectively. These costs as a percentage of sales are expected remain consistent over the time horizon. Six additional supervisors with fixed alaries of $100,000 per year are also required. Insurance for the additional facility pace and equipment is $80,000 per year. Other incremental manufacturing verhead costs (property taxes, maintenance, security, etc.) excluding depreciation re estimated to be $500,000 annually. Wages are expected to increase with iflation over the time period, while other fixed costs are expected to remain steady. `HI would also need to purchase an additional seven delivery trucks for the cremental deliveries. The trucks would cost $100,000 each and would require 10,000 each in insurance annually. Transportation variable costs (gas, truck driver alaries, etc.) are estimated to be 15% of incremental revenue. he expansion is expected to cost $9,000,000 which will be fully capitalized to the alance sheet. An additional $1,000,000 will also need to be spent on production quipment for manufacturing purposes. Mr. Stark wants to see if the project will each profitability after 6 years, so he wants you to evaluate the return on investment that period using the investment criteria of payback period, discounted payback