Solar Flares Fireworks is considering adding a new line of fireworks called Sparkly Boomers to its product line. Sparkly Boomers are expected to have a five year life. Research has been performed for a cost of $6,000,000 and resulted in the following data: - Sparkly Boomers will need a new factory at a cost of $12 million with an installation cost of $4 million. ( 5 year MACRS) The land used to build the factory generates $150,000 of income a year. - Sparkly Boomers are projected to sell 500 units a year at a price of $35,000 per unit and an expense of $20,000 per unit - Crackling Fire (a current best seller) is expected to sell 100 units less a year with a price of $17,000 per unit and a cost of $7,000 per unit. - Soothing Lights is expected to sell 50 units more a year with a price of $5,000 per unit and a cost of $1,000 per unit - If the project is implemented, for $4,000,000, refurbishing the Crackling Fire's and Soothing Light's factories can be combined - this cost is amortized using a 5 year MACRS - The Crackling Fire factory was built 3 years ago for a price of $6 million and can be sold today for $4 million. This factory had a 5 year MACRS. - At the end of five years the Sparky Boomer factory will be sold for $1 million This project will have no impact on net working capital but will increase fixed expenses $600,000 a year The company has a 20% tax rate. The company is 60% debt with a pre-tax cost of 6% and 40% common stock. The common stock's beta is 2.5 , market rate is 10% and risk free rate is 2%. Using the Weighted Average Cost of Capital and the Profit Metrics (payback, Profit Index, NPV and IRR) determine if you should do this project Show all work