5. Analysis of an expansion project Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of McFann Co.: McFann 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 3,000 3,250 3,300 3,400 Sales price $17.25 $17.33 $17.45 $18.24 Variable cost per unit $8.88 $8.92 $9.03 $9.06 Fixed operating costs except depreciation $12,500 $13,000 $13,220 $13,250 Accelerated depreciation rate 33% 15% 7% 45% 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 at would be when using accelerated depreciation. the end of the project's four-year life. McFann pays a O $8,375 constant tax rate of 40%, and it has a weighted average O 9,422 cost of capital (WACC) of 11%. Determine what the O $12,563 project's net present value (NPV) would be when using O $10,469 accelerated depreciation. Aa Aa EL