You are manager of a manufacturing business. Business is going very well and one production line is at full capacity. You want to double the size of the production line. Engineering has estimated the cost and time required. It can be accomplished without effecting the existing production. The timing of the cash flows for the facility is as follows.

Month	Cash Flow
1	$ (20,000.00)
2	$ (45,000.00)
3	$ (55,000.00)
4	$ (70,000.00)
5	$ (75,000.00)
6	$ (80,000.00)
7	$ (90,000.00)
8	$ (90,000.00)
9	$ (120,000.00)
10	$ (140,000.00)
11	$ (180,000.00)
12	$ (200,000.00)
13	$ (225,000.00)
14	$ (175,000.00)
15	$ (200,000.00)
16	$ (50,000.00)
Total	$ (1,815,000.00)

The current cost of capital is 9% APR. What is the total cost of the project?

You pay interest on the project every year (i.e., you do not pay off the capital, only the interest.) Calculate the total project cost including interest. Use annual numbers to calculate the internal rate of return.

Sales start after the project is completed. You estimate that sales for the first year will be at 30% of capacity and increase to 60% in year 2. Sales after year 2 are estimated at 85% of capacity. The current production line generates $1,100,000 in net profit. The profit at 30% is 0. The profit above 30% will be proportional to the percent capacity utilized. The company demands a minimum 20% internal rate of return for capital projects. Does the 10-year rate of return meet the company requirements? Assume that the company pays interest on the capital for the entire ten years. (Show correct total project cost including Interest, 10 year cash flow, and IRR for project)

Please identify formulas and explain why. Thank you!