Linda Gardens Ltd, wants to take advantage of people's interest with gardening during lockdown by adding wi-fi features to its lawn mowers so people can listen to music and watch videos whilst in the garden. However, there is a risk this idea may be a fashion and work only in lockdown times. These are the numbers she has obtained from a marketing study. Sales are estimated at 120,000 units at a price of $110 per unit. Variable manufacturing costs are estimated at $80.00 per unit, incremental fixed manufacturing costs (excluding depreciation) at $2,700,000 annually, and additional selling and general expenses related to the new mowers is likely to be $600,000. To manufacture the new mowers the company must invest $400,000 in new production facilities. It is estimated the new facilities will have a three-year service life with only a $100,000 salvage value. Depreciation will be computed on a straight-line basis. All reve- nue and expenses other than depreciation will be received or paid in cash. The com- pany's combined federal and state income tax rate is 30 percent. INSTRUCTIONS a) b) Explain the benefits/drawbacks of different capital budgeting techniques such as NPV, Payback, IRR etc. (5%) Prepare a schedule showing the estimated increase in annual net income from the planned manufacture for the new lawn mower. (5 points) Compute the annual net cash flows expected from this project over the 3-year pe- riod. (5 points) c) d) e) f) Compute for this project the payback period, (5 points) return on average investment, (5 points) and net present value (NPV) discounted at an annual rate of 15 percent (5%). Please note: Round the payback period to the nearest tenth of a year and the return on aver- age investment to the nearest tenth of a percent