Part II. Problem Solving Questions (50 points) 1. Parker Products manufactures a variety of household products. The company is considering introducing a new detergent. The company's CFO has collected the following information about the proposed product. use only relevant information.) (18 points) (Note. You may or may not need to use all of this information; You may or may The project has an anticipated economic life of 4 years The company will have to purchase a new machine to produce the detergent. The machine has an up-front cost of $1.8 million and it costs $0.1 million to install the machine. Additional $0.1 million is needed to modify the machine. The machine will be depreciated on a straight-line basis for fouP years. The company anticipates that the machine will last for four years, and that after four years, it can be sold for $0.5 million. If the company goes ahead with the proposed product, it will have an effect on the company's net operating working capita $140,000 and accounts payable will increase by $40,000. The net operating working capital will be recovered after the project is completed. . At the outset, inventory will increase by The detergent is expected to generate sales revenue of $1 million the first year, $2 million the second year, $2 million the third year, and $1 million the final year. Each year the operating costs (not including depreciation) are expected to equal 50% of sales revenue. The company's interest expense each year will be $100,000 . The company spent $50,000 last year on R&D of the new detergent and this cost cannot . The new detergent is expected to reduce the after-tax cash flows of the company's existing . ucts by $250,000 a year for four years The company's overall WACC is 10%. However, the proposed project is riskier than the average project for Parker, the project's WACC is estimated to be 12%. . The company's tax rate is 40%. . Vhat is the net present value of the proposed project