Stark Inc., a sottware company, has developed a new game, Pan$-$Dango, which it plans to launch in the near future. Sales of the new game are expected to be very strong, following a favourable review by a popular PC magazine. Stark Inc. has been informed that the review will give the game a 'Best Buy recommendation. Sales volumes, production volumes, and selling prices for 'Pan$-$Dango over its four$-$year life are expected to be as follows:YearSales & production $($units$)150\mathrm{.}000$Selling price $($$ per game$)1$$$25270,000$$$24360\mathrm{.}000$$$23460\mathrm{.}000$$$22$Financial information on 'Pan$-$Dango for the first year of production is as follows:Direct material cost$$5\mathrm{.}40$ per gameOther variable production cost$$6\mathrm{.}00$ per gameFixed costs$$600,000$Advertising costs to stimulate demand are expected to be $$650,000$ in the first wear of production and $$100,000$ in the second year of production. No advertising costs are expected in the third and fourth years of production. Fixed costs represent incremental cash fixed production overheads. 'Pan$-$Dango' will be produced on a new production machine costing $$800,000.$ Tax allowable depreciation will be claimed on a straight$-$line basis at a rate of $25\%.$ The machine will have a useful life of four years at the end of which no scrap value is expected. 'Pan$-$Dango requires an initial investment in net working capital of $$29,000.$Stark Inc. pays tax on profit at a rate of $30\%$ per year and tax liabilities are settled in the year in which they arise. Stark Inc. uses an after$-$tax discount rate of $10\%$ when appraising new capital investments. Ignore inflation.Required:a$.$ Calculate the net present value of the proposed investment and briefly comment on your findings.$(11$ marks$)$b$.$ Calculate the internal rate of return for the proposed investment.$(5$ marks$)$c$.$ Discuss the reasons why the net present value investment appraisal method is preferred to other investment appraisal methods such as payback, average accounting return and internal rate of return.