12-1a. If Company ABC plans to invest $9,000,000 on equipment, $3,000,000 on net working capital (NWC), what is the Company's Initial investment outlay? b. It the Company spent $50,000 for market research last year, should this expense be included in the analysis? c. It the Company can sell a building for $70,000, but now, it is kept to locate the purchased equipment, should this expense be included in the analysis as a cost? 12-2a. If Company XYZ plans to launch a new production line, and in year 1, will have sales revenue $10,000,000, operating cost is 70% of the sales revenue, depreciation is $2,000,000, and tax rate is 40%, what is the Company's projected cash flow in year 1? b. If the Company's launch of the new production line will cause the exit of an existing production line that can generate $1,000,000 operating income before tax, how much will be the Company's projected cash flow in year 1, if we take this opportunity cost or cannibalization into the consideration? c. If the tax rate fell to 30%, what will be the project's cash flow? 12-3If the Company AD has an equipment with original cost $20,000,000, depreciation is 80% of the cost of equipment, and the book value is $4,000,000. At the end of its physical life time year, if the Company can sell the equipment for $5,000,000 in the market, what is the gain on sale? What is the after tax (AT) net salvage value if the tax rate is 40%? 12-4If the Company XYZ plans to invest on a project with initial capital outlay of $40,000, and annual cash inflow $9,000 for 10 years, what's the NPV of the project if the discount rate is 10%? Should the Company accept this project? 12-5For two projects A and B, both have initial capital outlay of $20,000 at T=0, Project A has 6 year physical life time with annual cash flow of $6,000. Project B has 3 year physical life time with same $6,000 annual cash flow. If the discount rate is 10%, which project should be chosen if using EEA (Equivalent Annual Annuity) approach to calculate? 12-6If Company ABC is expected to have different NPVs under different scenarios as below: Scenario ProbabilityNPV (in million) 1 5%-$70 2 20%-$25 3 50% $12 4 20% $20 5 5% $30 What is the Company's E(NPV), sNPV, and CV