2. For the following cases you are required to take decisions regarding companies' long term investment. (9 Points; as indicated) (ILOS: B1/C1/C2) a. Quad Enterprises is considering a new three-year expansion project that requires an initial investment of $2.32 million of which $0.30 million investment in net working capital which will remain constant during the life of the project. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1.735 million in annual sales, with costs of $650,000. If the tax rate is 21 percent and cost of capital is 8%. should the project be accepted on the basis of NPV? Why? (7 points) (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars). Present your answer in a table. NPV b. Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land six years ago for $3.6 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $4.1 million. The company wants to build its new manufacturing plant on this land; the plant will cost $18.1 million to build, and the site requires $950,000 worth of grading before it is suitable for construction. Assess the spending and decide which of them should not be included in Year O cash flow? Why? (2 Points) (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars)