1) Life Period of the Equipment = 4 years				8) Sales for first year (1)			$ 200,000
2) New equipment cost			$ (200,000)	9) Sales increase per year			5%
3) Equipment ship & install cost			$ (35,000)	10) Operating cost:			$ (120,000)
4) Related start up cost			$ (5,000)	(60 Percent of Sales)		-60%
5) Inventory increase			$ 25,000	11) Depreciation (Straight Line)/YR			$ (60,000)
6) Accounts Payable increase			$ 5,000	12) Tax rate			35%
7) Equip. Salvage Value Estimated			$ 15,000	13) Cost of Capital (WACC)			10%
End of Year 4	(fully depreciated )

(a)	Estimate NPV, IRR and Payback Period of the project if the Marginal
	Corporate Tax is reduced to 20%. Would you accept or reject the project?
	Assume Straight-Line Depreciation.
(b)	Estimate NPV, IRR and Payback Period of the project if Equipment is fully
	depreciated in first year and tax rate is reduced to 20%. Would you
	accept or reject the project?
( c)	As a CFO of the firm, which of the above two scenarios (a) or (b)
	would you choose? Why?