2. Analysis of an expansion project Companies ifvest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of Fox Co.: Fox Co. is considering an investment that will have the following sales, variable costs, and fixed aperating costs: This project will require an investment of $15,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation at t=0, so it will be fully depreciated at the time purchase. The equipment will have no salvage value at the end of the project's four-year life. Fox pays a constant tax rate of 25%, and it has a weighted average cost of capital (VinCC) of 11N. Determine what the project's net present value (NPV) would be under the new tex law. Determine what the project's net present value (NPV) would be under the new tax law. $80,349$120,523$115,501$100,436 Now determine what the project's NPy would be when using straight-line depreciation. Using the depreclation method will result in the highest NPV for the project. No other firm would take on this project if Fox turns it down. How much should Fox reduce the NPV of this project it it discovered that this project would reduce one af its division's net after-tax cash flows by 5400 for each year of the four-year project? $1,055$1,365$1,241$745 Fox spent $2,250 on a marketing study to estimate the number of units that it can sell each yoar. What should Fox do to take this information inte account? The company does not need to do anything with the cost of the marketing study becouse the marketing study is a sunk cost. Increase the amount of the initial investment by $2,250. Increase the NPV of the project $2,250