Parkinson Plc is considering a major investment project in a new product, the Legend. Market research indicates that the demand for the Legend at a unit selling price of 12.00 and advertising costs over the next four years, are as follows: Demand (units) Advertising Costs (5) Year 20,000 20,000 2 15,000 10,000 10,000 8,000 8,000 Nil 1 3 4 The demand for the Legend after year 4 is expected to be too few to continue marketing it. The variable cost per Legend is expected to be 6.00. The project requires a new machine to be purchased for 205,000. The machine will be depreciated using the straight-line method over 4 years. There is no scrap value at the end of its useful life. The board of directors' judge that the figures shown above are an accurate estimation for each of the years. They also believe that the appropriate discount rate to use for this project is 10% per annum. The discount factors for a cost of capital at 10% and 20% are as follows Year 20% 0 10% 1.000 0.909 0.826 1 1.000 0.833 0.694 0.589 2 3 0.751 0.683 4 0.482 Required: a) Estimate the cash flows for the 4 years of the project life. [4 Marks). b) Calculate the (non-discounted) Payback Period 14 marks) c) Using the initial investment, calculate the Accounting Rate of Return (ARR). 17 marks] d) Using the discount factors detailed above, calculate the Net Present Value (NPV) at 10%. 17 marks) e) Using the discount factors detailed above, calculate the Internal Rate of Return (IRR). 17 marks f) Based upon your calculations in parts a), b), c), and d) above, advise the management of Parkinson Plc on whether they should invest in the new project and why. (5 mark] g) Advise the board of directors on the advantages and disadvantages of each technique used. Please state at least one advantage and one disadvantage for each of the four techniques used above. [16 marks)