The Austin Saddle Company Expansion (ASC) is considering expanding its tannery facilities, increasing its production capacity by 20 percent. The ASC brought in the marketing, production management, procurement, capital investment, and accounting department to formulate estimates of the initlal cost of the expansion, as well as future cash flow that can be used to evaluate this expansion. The procurement and capital management teams expect that the expansion will require a cost of $10 million initially, with the first year's operating cash flow of $2 million, 3 million for the second year and 4 million at the third year, 2 million and 1 million at the 4th and 5th year respectively. Afterwards, the operating cash flow is expected to grow at 3 percent for foreseeable future. The ACS has a cost of capital of 8 percent, and the expansion project is expected to have risk similar to ACS's typical project. A. Should ACS expand? Explain your reasoning based on NPV, IRR, Payback period and Profitability index criteria. B. If ACS's cost of capital increased to 9 percent, other variables stay constant, would your recommendation change? Based on the new NPV, IRR, Payback period and Profitability index C. At what cost of capital, if any, would your recommendation change? explain.

Please give each way in excel, and also the terminal OCF that I don't understand where is the number come from and give the way clearly. Thanks