Problem $9-22$ Calculating Project Cash Flows and NPV $[$LO $2]$

Pappy's Potato has come up with a new product, the Potato Pet $($they are freeze$-$dried to last longer$).$ Pappy's paid $$180,000$ for a

marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $$895,000$ per year. The fixed

costs associated with this will be $$228,000$ per year, and variable costs will amount to $24$ percent of sales. The equipment necessary for

production of the Potato Pet will cost $$970,000$ and will be depreciated in a straight$-$line manner for the four years of the product life $($as

with all fads, it is felt the sales will end quickly$).$ This is the only initial cost for the production. Pappy's has a tax rate of $22$ percent and a

required return of $16$ percent.

a$.$ Calculate the payback period for this project.

Note: Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

b$.$ Calculate the NPV for this project.

Note: Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

c$.$ Calculate the IRR for this project.

Note: Do not round intermediate calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$