-07548cmid=2026305 Answer all parts in Question 1: A'Striker Co Ltd (AS) is a leading producer of golf balls and footballs. As part of the firm's expansion, AS is now considering investing in a machine to produce baseballs. The baseballs would be manufactured in a building owned by the firm and located in Beijing. The cost of the machine is $200,000 and is expected to last for 5 years. Depreciation for tax purposes is expected to be based on Modified Accelerated Cost Recovery System (MACRS). The MACRS schedule is given in the Formula Sheet At the end of the 5 years, the machine is expected to be sold at a price estimated to be $60,000. The price of baseballs in the first year is expected to be $25. The baseball market is highly competitive and hence AS anticipates that the price will increase at only 2 percent per year compared to general inflation of 5%. On the other hand, the plastic material used to produce the baseball is rapidly become more expensive and production cost are expected to grow at 10% per year and cost of production per unit will be $15. AS determines that initial net working capital of $12,000 is required. Subsequently, the net working capital at the end of each year is expected to be 10% of sales. At the end of the project life, the net working capital will be fully recovered. Production by year of the baseball in units are expected to be in the table below. The firm pays tax at 34% and the required rate of return for the project is 11% 0 1 2 3 4 5 Sales (Units) 5000 8000 12000 10000 6000 REQUIRED: a) Calculate the Net Present Value (NPV) for this project (23 marks) b) Based on the calculation in (a) should AS proceed with the proposal? Give reason(s) for your answer. (2 marks) (Total: 25 marks)