Pilot Plc is investigating the financial viability of a new product the Phoenix. The Phoenix is a short-life product for which a market has been identified at an agreed design specification. The product will only have a life of 12 months. The following estimated information is available in respect of Phoenix. (1) Sales should be 1,200 units in the year. An average selling price of 1,050 per unit is expected. All sales are for cash. (2) An 80% learning curve will apply for the first 700 units after which a steady state production time will apply, with the labour time per unit after the first 700 units being equal to the time for the 700th unit. The first unit took 500 hours. The labour cost of the first unit was measured at 2,500, this was for 500 hours at 5 per hour. (3) Variable overhead is estimated at 40% of direct labour cost. (4) Direct material costs will be 514,000 for the year. All purchases are made for cash. (5) A target net cash flow of 350,000 is required in order for this project to be acceptable. Requirement (a) Prepare detailed calculations to show whether product Phoenix will provide the target net cash flow. (14 marks) (b) Calculate what length of time the second unit will take if the actual rate of learning is: (i) 80% (ii) 90% (iii) Explain which rate shows the faster learning. (5 marks) (c) Suggest specific actions that Pilot plc could take to improve the net cash flow calculated above. (6 marks)