Question Your company is thinking of commencing a new production run of its popular smartphone. The following information relates to this project. The expected productive life of the production equipment is 4 years. The initial outlay for equipment will be $8 million. This will be depreciated on a straight-line basis over the life of the project to a book value of zero. The new production will result in incremental revenue of $6 million and incremental costs (excluding depreciation) of $1.5 million. The project will require additional net working capital of $1.5 million. The corporate tax rate is 30% and the company's cost of capital for this project is 12% p.a. Fortunately, your company has also provided you with the following table, which outlines the above the various cash flows throughout various stages of the project's life. Year 0 Years 1-4* Year 5 Revenue 6,000,000 Costs -1,500,000 Depreciation -2,000,000 EBIT 2,500,000 Tax -750,000 Q Earnings 1,750,000 Depreciation 2,000,000 Outlay -8,000,000 Net Working Capital -1,500,000 1,500,000 Free Cash Flows -9,500,000 3,750,000 1,500,000 *Note: The column labelled "Years 1-4 indicates cash flows happening in each year. They are not the total (cumulative) for the period *Note: The column labelled "Years 1-4" indicates cash flows happening in each year. They are not the total (cumulative) for the period Please answer the following questions and provide your response in the space below. Part A, B and C Calculate the NPV of the Free Cash Flows (FCF) arising from each of the following three broad phases (Year 0 Years 1-4, Year 5) of the project's life identified in the table above: a. FCF in Year o b. FCF in Years 1-4 C. FCF in Year 5 Part D Drawing on your calculations, justify whether you would you recommend proceeding with this project. Your answer must be written in your own words