RET Inc. currently has one product, low$-$priced stoves. RET Inc. has decided to sell a new line of medium$-$priced stoves. Sales revenues for the new line of stoves are estimated at $$20$ million a year. Variable costs are $80\%$ of sales. The project is expected to last $10$ years. Also, non$-$variable costs are $$2,000,000$ per year. The company has spent $$3,000,000$ in research and a marketing study that determined the company will lose $($cannibalization$)$ $$4$ million in sales a year of its existing low$-$priced stoves. The production variable cost of the existing low$-$priced stoves is $$2$ million a year.

The plant and equipment required for producing the new line of stoves costs $$20,000,000$ and will be depreciated down to zero over $20$ years using straight$-$line depreciation. It is expected that the plant and equipment can be sold $($salvage value$)$ for $$12,000,000$ at the end of $10$ years. The new stoves will also require today an increase in net working capital of $$3,000,000$ that will be returned at the end of the project.

The tax rate is $30$ percent and the cost of capital is$10\%.1.$ What is the initial outlay $($IO$)$ for this project? $2.$ What is the annual Earnings before Interests, and Taxes $($EBIT$)$ for this project? $3.$ What is the annual net operating profits after taxes $($NOPAT$)$ for this project? $4.$ What is the annual incremental net cash flow $($operating cash flow: OCF$)$ for this project? $5.$ What is the remaining book value for the plant at equipment at the end of the project? $6.$ What is the cash flow due to tax on salvage value for this project? $7.$ What is the project's cash flow for year $10$ for this project? $8.$ What is the Net Present Value $($NPV$)$ for this project?