a$.$ Calculate the project's initial Time $0$ cash flow, taking into account all side effects. Assume that the net working capital will not

require flotation costs.

Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer

in dollars, not millions of dollars, rounded to the nearest whole number, e$.$g$.,1,234,567.$

b$.$ The new RDS project is somewhat riskier than a typical project for DEI, primarily because the plant is being located overseas.

Management has told you to use an adjustment factor of $+1$ percent to account for this increased riskiness. Calculate the

appropriate discount rate to use when evaluating DEl's project.

Note: Do not round intermediate calculations and enter your answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$

c$.$ The manufacturing plant has an eight$-$year tax life, and DEI uses straight$-$line depreciation. At the end of the project $($that is$,$ the

end of Year $5),$ the plant and equipment can be scrapped for $$3\mathrm{.}6$ million. What is the aftertax salvage value of this plant and

equipment?

Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest

whole number, e$.$g$.,1,234,567.$

d$.$ The company will incur $$5,900,000$ in annual fixed costs. The play. is to manufacture $12,500$ RDSs per year and sell them at

$$10,350$ per machine; the variable production costs are $$8,950$ per RDS$.$ What is the annual operating cash flow $($OCF$)$ from this

project?

Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest

whole number, e$.$g$.,1,234,567.$

e$.$ DEl's comptroller is primarily interested in the impact of DEl's investments on the bottom line of reported accounting statements.

What will you tell her is the accounting break$-$even quantity of RDSs sold for this project?

Note: Do not round intermediate calculations and round your answer to the nearest whole number, e$.$g$.,32.$

f$.$ Finally, DEl's president wants you to throw all your calculations, assumptions, and everything else into the report for the chief

financial officer; all he wants to know is what the RDS project's internal rate of return $($IRR$)$ and net present value $($NPV$)$ are.

Assume that the net working capital will not require flotation costs.

Note: Enter your NPV answer in dollars, not millions of dollars, e$.$g$.,1,234,567.$ Enter your IRR answer as a percent. Do not

round intermediate calculations and round your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.$