1.-Calculation of the project's FEO (OA1) Summer Tyme, Inc., considers a three-year expansion project that requires an initial investment in fixed assets of 3.9 million dollars. The fixed asset will depreciate on a straight-line basis to zero over its three-year tax life, after which it will be worthless. The project is estimated to generate $2,650,000 in annual sales and costs of $840,000. If the tax rate is 35%, what is the FEO for this project?

2.-Calculation of the NPV of the project (OA1) In the previous problem, suppose that the required return on the project is 12%. What is the NPV of the project?

3.-Calculating Cash Flow from Project Assets (OA1) In the problem above, assume that the project requires an initial net working capital investment of $300,000 and, at the end of the project, the fixed asset will have a market value of $210,000. Dollars. What is the net cash flow of the project in year 0? In year 1? In year 2? And in year 3? What is the new VPN?

4.-NPV and Modified ACRS (OA1) In the problem above, assume that the fixed asset actually falls into the three-year MACRS class. All other factors are the same. What is now the net cash flow of the project in year 1? In year 2? And in year 3? What is the new VPN?