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35 NuCar is evaluating the idea of adding manufacturing equipment to their plant. Pertinent information about this capital budgeting project is highlighted below: - Over

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NuCar is evaluating the idea of adding manufacturing equipment to their plant. Pertinent information about this capital budgeting project is highlighted below: - Over the past 12 months, NuCar has spent $1,750,000 to make their manufacturing process more efficient. - The new manufacturing equipment will cost $75,600,000 fully installed. The equipment will be depreciated over 20 years to a salvage value of $0. NuCar uses straight-line depreciation. - If Nucar adds the new equipment, sales are expected to increase by $27,400,000 and costs are expected to increase by $10,000,000. - The appropriate tax rate for NuCar is 40%. - The firm's optimal capital structure is 65% equity and 35% debt. - The cost of equity is 17%, and the before-tax cost of debt is 9%. - The firm's optimal capital structure is 65% equity and 35% debt. - The cost of equity is 17%, and the before-tax cost of debt is 9%. What is the NPV of the project? 1) $9,718,024,66 2) None of the given answers for this question are the correct answer. 3) $6,155,332.33 4) $8,663,536.44 5) $7,856,194.36 6) $9,141,606.15

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