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A new (2 year) project would require the purchase of new equipment today at a cost of $9000. The equipment would be depreciated on a

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A new (2 year) project would require the purchase of new equipment today at a cost of $9000. The equipment would be depreciated on a straight-line basis over its 2-year useful life to a book value of $6000. At the end of the life of the project (at the year 2 point), the machine will be sold for an estimated $1000. The project will cause an increase in Sales of $8000 in each of years 1 and 2, and an increase in operating expenses of $4000 in each of years 1 and 2. The project will require an increase in Inventory of $1400 and an increase in Accounts Payable of $1200 up front (year 0). These accounts are expected to gradually return to their pre-project levels over the 2-year life of the project. The firm's marginal tax rate is 30%, and its WACC is 10%. The NPV of this project is $________ Round your final answer to 2 decimal places (example: 1234.56). Do not round intermediate work. For the previous question, fill in the blanks for the following select components of the problem. Be sure to include a negative sign if appropriate. (4 points per item) The net cash flow effect related to net working capital in year 0 is $ The net cash flow effect related to net working capital in each of years 1 and 2 is $ per year. The net after-tax salvage value related to the equipment sale in year 2 is $ The depreciation tax shield amount in each of years 1 and 2 is $ per year. Based on your analysis, should this project be accepted? Type YES or NO

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