4. Frumpy Fashions is considering expanding its building so it can stock additional merchandise for travelers and tourists. Store manager James Grump anticipates that building expansion costs would be $150,000. The firm's suppliers are willing to provide inventory on a consignment basis so there would be no additional working capital needed upon expansion. Annual incremental fixed cash costs for the store expansion are expected to be as follows: Year Amount 1 $20,000 2 $27,000 3 $27,000 4 $27,000 5 $30,000 6 $30,000 7 $30,000 8 $63,000 Grump estimates that cash inflows would be increased by $60,000 every year from the additional merchandise sales, which is the contribution margin on the incremental sales. Because of the uncertainty about the future. Grump does not want to consider any cash flows after 8 years. The firm uses 9% discount rate. A. B. Calculate the Profitability Index (PI) of the project. Calculate the Internal Rate of Return (IRR) of the project. (Ctrl)- Focus