Jack Spratt Low Fat Products has come up with a new product, Spratt Sprouts. The company paid $75,000 for a marketing survey to determine the viability of the product. From the study, it was determined the product could produce sales of $800,000 per year for the next five years. Variable costs will be 25% of sales and the fixed costs associated with the product will be $210,000 per year. The equipment necessary for production will cost $950,000 and will be fully depreciated on a straight-line basis for the five years of the product life, at which point it will have no value. Jack Spratt has a marginal tax rate of 35% and a required return on this project of 14%.

1. What is the NPV for this product?
2. Based on the NPV, should the new product be launched?
3. What is the Profitability Index?
4. Extra Credit (not required) What is the Internal Rate of Return?