GHI Corp is considering a proposal to build a unique smartphone. Given that smartphone technology changes rapidly the project will last for three years and requires an up-front investment into equipment of $1.5m which will be depreciated straight-line over three years. Sales will be $5 million for each of the three years. Total manufacturing costs and operating expenses (excluding depreciation) are 80% of sales, and profits are taxed at 30%. Finally, the project requires an immediate (i.e. in year 0) initial investment into net working capital of $500,000 which will be fully recovered at the end of year 3. If the cost of capital is 15% determine if this project should be accepted or not. (50 marks) (b) Discuss the winners curse theory of underpricing and the proxies for ex ante uncertainty.

can you show me step-by-step how to do that please?