Pappy$$s Potato has come up with a new product, the Potato Pet $($they are freeze$-$dried to last longer$).$ Pappy$$s paid $$120,000$ for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $$915,000$ per year. The fixed costs associated with this will be $$235,000$ per year, and variable costs will amount to $20$ percent of sales. The equipment necessary for production of the Potato Pet will cost $$890,000$ and will be depreciated in a straight$-$line manner for the four years of the product life $($as with all fads, it is felt the sales will end quickly$).$ This is the only initial cost for the production. The tax rate is $23$ percent and the required return is $13$ percent.

Calculate the payback period, NPV$,$ and IRR.