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Question 3 Use the following prompt to answer the subsections: Aunt Sally's Sauces, Inc., is considering expansion into a new line of all-natural, cholesterol- free,

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Question 3 Use the following prompt to answer the subsections: Aunt Sally's Sauces, Inc., is considering expansion into a new line of all-natural, cholesterol- free, sodium-free, fat-free, low-calorie tomato sauces. Sally has paid $50,000 for a marketing study which indicates that the new product line would have sales of %650,000 per year for each of the next six years. Manufacturing plant and equipment would cost $500,000, and will be depreciated according to ACRS as a five-year asset. The fixed assets will have no market value at the end of six years. Annual fixed costs are projected at $80,000 and variable costs are projected at60%of sales Networkingcapital requirements are $75,000 for the n-year life of the project; the outlay for working capital will be recovered at the end of six years. Aunt Sally's tax rate is 34% and the firm requires a 16% return. (3.1) Use the tax-shield approach to compute the operating cash flow for years 1 through (3.2) Compute the net present value for the new product line. (3.3) Compute the internal rate of return for the new product line

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