MINICASEGPS World S$.$A$.$L$.,$ Part $1$Gps World S$.$A$.$L$,$ is a medium$-$size company located on the outskirts of Beirut. Under the general manager Majid Al Hamli, GPS World has grown from a local electronics retal store to one of Lebanon's leading manufacturers and distributor of navigation equipment in only five years. Today, Majid is meeting with the company's head of marketing, Omar Al Mansoor, to discuss the development of a new product, the Map$100,$ a new generation GPS system with detailed Middle East road and sea area coverage for driving, boating, or plain walking applica$-$tions. The new interface of the Map$100$ allows for an automatic update of the road system and the area's general infrastructure without the inconvenience of a manual download of new maps. Omar's department has conducted extensive market research to gauge potential demand for the new product and to sense the amount of money potential customers are likely to pay for the Map$100$ features. Based on these findings, Omar and his team are convinced that at a price of LL $202,500($$$135)$ per unit, $15,000$ Map$100$s could be sold the first year.With an aggressive marketing campaign, second$-$year sales could be boosted to $16,000$ units. Unfortunately, barriers to entry are quite low and new rivals are expected to increase product supply significantly. As a result, sales are likely to go down by $500$ units in year $3$ and $4$ after which the annual sales decrease accelerates to $1,000$ units. The resulting revenue reduction is amplified by an annual unit price decrease of $3$ percent after year $2.$ Variable costs per unit are LL $70,500($$$47)$ for the first year and estimated to increase by $4$ percent per year. First$-$year annual fixed costs are set at LL$,600$ million $($$$400,000)$ but are likely to go up by LL $15$ million $($$$10,000)$ per year. The recommended investment period is only $6$ years, mainly because of the anticipated reduction in profit margins as a result of a combination of heightened competition and inflationary pressure. The initial investment of LL $3\mathrm{.}6$ billion $($$$2\mathrm{.}4$ million$),$ for the production equipment, will be depreciated according to the $7-$year asset class MACRS schedule. With the launch of the project, an immediate net working capital investment of LL $337\mathrm{.}5$ million $($$$225,000)$ will be required. As the financial analyst of the company, Majid has asked you to join the meeting. Based on your estimate of GPS World's cost of capital of $11\mathrm{.}5$ percent, you perform the following tasks:QUESTIONS$1.$ Generate pro$-$forma income statements for years $1-6$ and determine the resulting annual operating cash flows. Assume a corporate tax rate of $15$ percent$\mathrm{.}2.$ Compute the annual expected net cash flow for years $1-6,$ assuming that the net working capital investment will be necessary right away and that it will be recovered in full at the end of year $6.$ At the end of the project's intended life $($year $6)$ the production equipment is expected to be sold at its book value$\mathrm{.}3.$ Determine the payback period using the simple and the discounted method. Do you suggest going ahead with the project?$4.$ Apply the NPV$,$ IRR, and MIRR method to the computed net cash flows and interpret your results.Also compute the profitability index. Do your results support your earlier conclusions