Sharp Corporation is launching a new product in a new market. The company has undertaken market research and test marketing at a cost of $$500,000$ because of which, it expects the new product to be successful. Sharp plans to charge lower selling prices in the initial stages and then gradually increase the selling price assuming that the new product will become established in the market. Forecast sales volumes, selling prices and variables costs are as follows:Year $1$Year $2$Year $3$Year $4$Sales Volumes $($in units$/$ year$)200,000800,000900,000400,000$Selling price $($$$/$unit$)15182222$Variable costs are estimated at $$9$ per unit and fixed costs are estimated at $$500,000$ per year. The initial cost of production equipment for the new product will be $$2\mathrm{.}5$ million, payable at the start of the venture. Production will cease at the end of year four because the new product is expected to have become obsolete due to new technology. The production equipment would be sold at the end of the four years for $$125,000.$Investment in working capital of $$1\mathrm{.}5$ million will be required at the start of the project.Sharp falls into the $20\%$ tax bracket. Tax$-$allowable depreciation is on a straight$-$line basis, with a zero residual value. Sharp has a weighted average cost of capital of $12\%$ and its cost of equity is $8\mathrm{.}5\%.$Required: $($Show all necessary working$)$a$.$ Calculate the net present value of the investment project and advise whether the investment is financially acceptable.$(10$ marks$)$b$.$ Calculate the internal rate of return of the investment project and advise whether the investment is financially acceptable.$(3$ marks$)$c$.$ Calculate the discounted pay$-$back period for the new machine and advise whether the investment is financially acceptable. Assume management has set a cut off period of three $(3)$ years.$(4$ marks$)$d$.$ Briefly discuss three $(3)$ disadvantages of the regular pay$-$back period. $(3$ marks$)$TURN OVERCourse Code.MGMT$20232023/../.\mathrm{.}16.$ Simplicity Incorporate$$1,000$ each and hav currently sellingSimplicity h tradingis $1\mathrm{.}05.$The University of the West Indies