Please provide your answer through calculations to the problem, by presenting the formulas you use, the calculations, the result and its interpretation. You want to launch a new product, which would involve the use of a new equipment costing $1,000,000. Annual sales of the new product would be 3,000 units, selling at $100 per unit. Unit costs would be as follows: Direct materials ($12 per unit) . Direct labour (4 hours at $10 per hour) Fixed costs including depreciation ($15) The project would have a five-year life, after which the new machine would have a net residual value of $600,000. Working capital requirements would be $7,000 in the first year, rising to $25,000 in the second year and remaining at this level until the end of the project, when it will be recovered. The company cost of capital is 10% . Please ignore taxes. Please decide if you should make this new product under these conditions, if yes why and if no what can you do to turn it efficient. AT FABIU. *** BET T T b. t