2. Analysis of an expansion project Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of Garida Co.: Garida Co. is considering an investment that will have the following sales, variable costs, and fixed operating 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 deprestion pays a constant tax rate of 25%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's net present value (NPV) would be under the new tax law. Determine what the project's net present value (NPV) would be under the new tax law. $115,501$100,436$80,349$120,523 Now determine what the project's NPV would be when using straight-line depreciation. Using the depreciation method will result in the highest NPV for the project. project would reduce one of its division's net after-tax cash flows by $300 for each year of the four-year project? $791 $931 $1,024 $559 The project will require an initial investment of $15,000, but the project will also be using a company-owned truck that is neing This truck could be sold for $9,000, after taxes, if the project is rejected. What should Garida do to take this information into account? The company does not need to do anything with the value of the truck because the truck is a sunk cost. Increase the amount of the initial investment by $9,000. Increase the NPV of the project by $9,000