Question three [25 marks] A local plastic company is considering expanding its facility. The investment that is required to expand the facility will cost 160,000 rands. Other information about the project is as follows: 1. The price and variable cost per the new product are rand 40 and rand 20 , respectively. 2. The annual demand should be about 130,000 plastic products. 3. Fixed cost, other depreciation, will be rand 70,000 which will cover the energy to operate the extrusion unit and wages for another part-time employee to stock the products during peak business hours. 4. The assets go into the MARCS 7 years classes for depreciation, with no salvage value. 5. The tax rate is 30 per cent. 6. Management wants to earn a return of at least 20 per cent on the project. A) Determine the after-tax cash flow for the project, B) Calculate the NPV and the payback period for the plastic project