Mercer Inc. is considering a proposal to manufacture high-end protein bars used as food supplements by body builders.

The company hired a consulting firm to help evaluate the project and paid the consulting fee of $60,000. The project requires use of an existing warehouse, which the firm acquired three years ago for $1.2 million and which it currently rents out for $140,000 (before tax). In addition to using the warehouse, the project requires an up-front investment into machines and other equipment with the purchase price of $1.5m and shipping and handling fees of $160,000. This investment can be fully depreciated straight-line over the next 8 years for tax purposes. However, Mercer Inc. expects to terminate the project at the end of 5 years and to sell the machines and equipment for $700,000. Before buying a new machine, the company plan to sell the old one at the price of $800,000. They spent $1.15 million on buying it 2 years ago with an assumed life of 6 years. Its depreciation is based on 5-year MACRS schedule.

The fixed cost is required at $50,000 per year. It is estimated that 75,000 units will be sold in the first

year at the price of 25$ per unit. The variable cost will be $13 per unit. Shipping cost is $15 per 10 units. From year 2 onward, the unit sales are expected to grow at a rate of 5% per year. The sales price and variable cost should increase with inflation, currently estimated at 4% per year. Besides, launching the new product is expected to decrease sales of the firm's others by 15,000 in year 1 & 20,000 in year 2.

Finally, the project requires an immediately investment into net working capital equal to 15% of predicted first-year sales. Subsequently, net working capital each year is 15% of the predicted sales of the following year.

To finance the project, the company would need to take a one-million dollar loan at 8% interest rate p.a. from HSBC over the life of the project. Annual interest expense is $80,000. Assume the corporate tax rate is 34%.and the discount rate for projects of this sort is 10%. What is the NPV, IRR, PI, PP, DPP, EAA (EAC) of the replacement project?