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You are manager of a manufacturing business. Business is goingvery well and one production line is at full capacity. You want todouble the size of the production line. Engineering has estimatedthe cost and time required. It can be accomplished withouteffecting the existing production. The timing of the cash flows forthe 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 ofthe project?

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

Sales start after the project is completed. You estimate thatsales for the first year will be at 30% of capacity and increase to60% in year 2. Sales after year 2 are estimated at 85% of capacity.The current production line generates $1,100,000 in net profit. Theprofit at 30% is 0. The profit above 30% will be proportional tothe percent capacity utilized. The company demands a minimum 20%internal rate of return for capital projects. Does the 10-year rateof return meet the company requirements? Assume that the companypays interest on the capital for the entire ten years. (Showcorrect total project cost including Interest, 10 year cash flow,and IRR for project)

Please identify formulas and explain why. Thankyou!