(Related to Checkpoint 12.1) (Comprehensive problem-calculating project cash flows, NPV, PI, and IRR) Traid Winds Corporation, a firm in the 30 percent marginal tax bracket with a required rate of return or discount rate of 10 percent, is considering a new project. This project involves the introduction of a new product. The project is expected to last 5 years and then, because this is somewhat of a fad product, it will be terminated. Given the following information, , determine the free cash flows associated with the project, the project's net present value, the profitability index, and the internal rate of return. Apply the appropriate decision criteria. Cost of new plant and equipment: $14,800,000 Shipping and installation costs: $220,000 Unit sales: \begin{tabular}{ll} Sales price per unit: & $320/ unit in years 1 through 4, \$270/unit in year 5 \\ Variable cost per unit: & $100/ unit \\ Annual fixed costs: & $600,000 \\ Working-capital requirements: & There will be an initial working capital requirement of \\ & $210,000 to get production started. For each year, the \\ & total investment in net working capital will be equal to 14 \\ & percent of the dollar value of sales for that year. Thus, \\ & the investment in working capital will increase during \\ & years 1 through 3, then decrease in year 4. Finally, all \\ & working capital is liquidated at the termination of the \\ & project at the end of year 5. \\ & Use the simplified straight-line method over 5 years. It is \\ The depreciation method: & assumed that the plant and equipment will have no \\ & salvage value after 5 years. \end{tabular} a. Determine the free cash flows associated with the project. The FCF in year 0 is $15,350,000. (Round to the nearest dollar.) The FCF in year 1 is $6,999,800. (Round to the nearest dollar.) The FCF in year 2 is $17,260,800. (Round to the nearest dollar.) The FCF in year 3 is $20,230,800. (Round to the nearest dollar.) The FCF in year 4 is $13,249,800. (Round to the nearest dollar.) The FCF in year 5 is $9,877,800. (Round to the nearest dollar.) b. The net present value (NPV) of the project is $34,348,012. (Round to the nearest dollar.) c. The profitability index (PI) of the project is 3.238 . (Round to three decimal places.) d. The internal rate of return (IRR) of the project is 75.38%. (Round to two decimal places.) e. Should Traid accept this new project? (Select the best choice below.) A. Yes. The project should be accepted because its NPV is positive, the PI is less than one, and the IRR is less than the required rate of return, 11%. B. No. The project should be rejected because its NPV is negative, the PI is less than one, and the IRR is less than the required rate of return, 11%. C. Yes. The project should be accepted because its NPV is positive, the PI is greater than one, and the IRR is greater than the required rate of return, 11%. D. More information is needed to make this decision