Olympic Apparel's Chief Financial Officer (CFO), Mr. Jackson, has been asked by the Chief Executive Officer (CEO) to help with their capital investment appraisal. The company has recently completed a feasibility study on whether to expand its market offerings to provide a specially designed high-quality Jacket for the men's clothing line. This would require an investment in capital infrastructure for the production line. Market research indicates no other competitors have ever sold this specially designed product before. It might open an entirely new market for Olympic Apparel. In addition, the feasibility study revealed that the Jacket could be sold via an online trading system (e-trade). Based on the results of the feasibility study, Olympic Apparel has estimated that 120,000 Jackets can be sold annually over the next five years at a starting price of $68 for each Jacket. Given the fast-paced technology associated with high competition, Olympic Apparel's management believes the life cycle of the Jacket will be short and therefore, Olympic Apparel will only be able to sell at $58 per Jacket for the first two years it is introduced into the market. Olympic Apparel will need to discount the price of each Jacket in years 3 and 4 to $54 and $52 for year 5. Variable costs are $35 per Jacket and total fixed costs are $300,000 per year. The project cost includes $6,500,000 to extend Olympic Apparel's production facilities, which will be fully depreciated within the useful life of 5 years. Additional working capital specific for this project is estimated to be $150,000, which will be returned at the end of the project's life. Olympic Apparel's CFO, Mr. Jackson, is not entirely certain about this project and would like your advice as Olympic Apparel have not sold via e-trading before. While the Jacket is expected to be attractive for women across the globe, Mr. Jackson is unsure about the level of risk the company will be exposed to with this project. Consider that the expected rate of return is 14 percent and the applicable corporate tax rate for Olympic Apparels is 30 per cent. REQUIRED: (a) What type of investment is Olympic Apparel making? Justify why you came to this conclusion (b) Calculate the net present value (NPV) of the Jacket project. Ensure you show your workings. (c) Advise Mr. Jackson as to whether Olympic Apparel should proceed with the Jacket for the men's clothing line. Justify your recommendation