A company with a project for an industrial boots plant wants to evaluate it for 3 years. The company will only sell pair

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A company with a project for an industrial boots plant wants toevaluate it for 3 years. The company will only sell pairs ofindustrial boots to the final consumer at a price of $42.00 thepair of boots, in cash. Projecting to sell 5,000 units the firstyear and from then on forward increase sales by 10% each year.Theinitial investment is estimated at $50,000.00, for which it willcontribute $10,000 of its own capital and $40,000.00 will beacquired through a credit for a 5-year term, paying annualinstallments of $11,000.00, of which $6,000.00 would be interest.Unit production costs are $30 per pair of boots, of which $24 areproduction costs. variables and 6 are fixed. Depreciation equals20% of production costs. Annual administration costs are $15,000.00and marketing costs are $18,000.00. $ these remain constantthroughout the life of the project. Of these two costs the 25 % ofthem, corresponds to depreciation. and. Income taxes are 25% on netincome.The company will not distribute dividends at the end of theperiod. Determine annual cash flow and income statement forthe 3 years of the project, the IRR and B/C, at a AARR of20%.