itarfish Ltd. specialises in Tuna production, and it is considering purchasing new equipment to produce a unique flavor product. The equipment costs 400,000 today. The life of the equipment will be 5 years after which it is expected to be sold for 30% of the original cost. Sales in the first year is expected o be 100,000 units and is forecasted to increase by 2% yearly. Each unit is going to cost $1.10 to produce. To introduce this new product in the market, each init will be sold at $1.90 in the first year after which the price will be set at $2.30 for the next four years. The equipment will also need to be maintained in he second year of production for a cost of $30,000. itarfish has 60% of its capital financed through equity, costing 15% p.a. The debt holders are willing to charge 2% less on what the shareholders earn. a) Draw the timeline and set out annual cash inflows, outflows and net cash flows by year. 5 marks] b) Calculate the weighted average cost of capital (WACC) for this project. [3 marks] c) Calculate the Net Present Value (NPV) for this project. Explain if the project should be accepted according to NPV decision rule. [4 marks] d) Given your answer to part c), without calculation, would you be able to identify if any of the following statements would apply? Why or why not? - Payback period > cut-off point - Payback period