3. 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: Year 1 Year 2 Year 3 Year 4 Unit sales 3,500 4,000 4,200 4,250 Sales price $38.50 $39.88 $40.15 41.55 Variable cost per unit $22.34 $22.85 $23.67 $23.87 Fixed operating costs except depreciation $37,000 $37,500 $38,120 $39,560 Accelerated depreciation rate 33% 45% 15% 7% This project will require an investment of $25,000 in new Determine what the project's net present value (NPV) equipment. The equipment will have no salvage value a would be when using accelerated depreciation. the end of the project's four-year life. Garida pays a O $41,828 constant tax rate of 40%, and it has a weighted average $29,098 O cost of capital (WACC) of 11%. Determine what the O $32,735 project's net present value (NPV) would be when using $36,372 O accelerated depreciation. 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