Superior Manufacturing is lauching a new product, that is expected to sell $950,000 of its new product the first year, and $1,500,000 each year thereafter. Direct cost labor and materials will be 55% in sales, indirect cost is $80,000 a year, the project requires a new plant with total cost of $1,000,000, which will depreciate over the next five years, A new line will require additional net investment in inventory, and receivables in the amount of $200,000. Assume no need for investment in building and land project. The firm's marginal tax rate is 35%, capital cost is 10%.

1. Prepare statement showing the incremental cash flows for project over 8-years period.
2. Calculate payback period (P/B) and NPV for project
3. Your answer from 2, do you think the project should be accepted? Why? Assume superior has a P/B (payback) policy of not accepting projects with life of over three years
4. If project required additional investment in land and building, how would this affect your decision? Explain