A manufacturing company is thinking of launching a new product.The company expec

A manufacturing company is thinking of launching a new product.The company expects to sell $950000 of the new product in thefirst year and $1500000 each year thereafter. Direct costsincluding labor and materials will be 45% of sales. Indirectincremental costs are estimated at $95000 a year. The projectrequires a new plant that will cost a total of $1500000 whichwill be a depreciated straight line over the next 5 years. The newline will also require an additional net investment in inventoryand receivables in the amount of $200000.