Q-6: Suppose a company has the opportunity to bring out a new product, the Vitamin-Burger. The cost of the asset is $95 million, shipping cost is $5 million, and the company's working capital would increase by $10 million during the life of the new product. The new project is estimated to have a useful life of four years, at which time the assets would be sold for $5 million. Management expects company sales to increase by $120 million the first year, $160 million the second year, $140 million the third year, and then trailing to $50 million by the fourth year because competitors have fully launched competitive products. Operating expenses are expected to be 70% of sales, and depreciation is charged based on straight line method. 7 The company's tax rate is 35%. Calculate: a) Compute Initial Investment at time o b) Operating Cash Inflow at time 1, 2, 3, and 4 c) Terminal Non-operating Cash Flow at time 4 d) Summarize the above Results to Calculate Relevant Cash Flow e) Calculate the Payback period for the Relevant Cash Flow and provide recommendation if maximum acceptable payback period is 2 years