Popcorn Boys Inc. are thinking of launching a product line extension, their new and improved version with enhanced product features and ESG quota packaging. With the below assumptions associated with this new product line extension, create a cash flow framework by year and then calculate NPV, IRR, Payback, MIRR, and PI as well as explain why Popcorn Boys Inc. should or should not launch the product line extension...

Project Life (Years) --- 4

Cost of equipment --- $ (1,600,000)

Year 0 Increase in Inventory --- $50,000

Year 0 Increase in Accounts Payable --- $30,000

Year 1 Increase in Accounts Receivable --- $120,000

The NWC Increases with Sales after Initial Investment

Year 1 Sales --- $1,500,000 ... (Sales increase by 7% each year)

Depreciation --- $ (400,000)

Operating Costs --- 25% of sales

G&A allocation --- $ (50,000)

Year 1 launch costs --- $ (75,000)

Market research cost the prior year --- $ (60,000)

Inflation estimate YoY --- 3% (Included in Sales)

WACC --- 12%

Taxes --- 21%

After tax cash flows eaten up from previous product line per year --- $ 50,000

Proceeds from salvage value of equipment at end of all 4 years --- $ 150,000