Otchaou Hand Tools Company (OHT) is considering adding a new line to its product mix. The production line would be set up in space in OHTs main plant. This plant space could be leased out to another firm at THB80,000 a year, payable at the beginning of the year, during the next 3 years if it is not used. The firm plans to spend THB300,000 today for a market study. If relevant, this cash outflow is treated as an operating expense. The invoice price of the machinery is THB2,830,000. Freight and installation costs are THB200,000. The machinerys estimated economic life is 3 years, with the estimated salvage value of THB30,000. Further, the firms operating current assets (OCAs) would have to be increased to handle the new line, but its operating current liabilities (OCLs) would also rise. Specifically, OCAs at the end of each year would be approximately 8% of the new lines sales in the following year, while the corresponding figure of OCLs is 3%. An increase in the net working capital is assumed to be completely recovered when the project ends. The new line would produce unit sales of 8,000 in the first year of its operation with an annual growth rate of 5% in unit sales. The unit price is THB500 in the first year of operation, but it increases according to an inflation rate which is projected to be 2% annually during the next 6 years. Incremental operating costs, excluding a depreciation expense, would equal 50% of the new lines revenue from sales. Additionally, the new product line is expected to cannibalize sales of the firms other line by THB200,000 per year. The operating costs (excluding a depreciation expense) of these expectedly decreased sales is 60%. The firms tax rate is 20%, and its weighted average cost of capital is 12%. The firm depreciates all property, plants and equipment using a straight-line method. Please ignore opportunity costs (if any) after the end of this project. Also please ignore all possible cash flows with insufficient data. Answer the following 2 sub-questions. (1) What are the incremental, net, free cash flows at the end of Year 0 through Year 3 (i.e., FCFo, FCF1, FCF2, and FCF3) of this project?

(2) Calculate the NPV and the MIRR of this project. Should OHT accept or reject the project? Why or why not?