ABC. Inc. produces widgets. They need to buy a new machine in order to increase revenues. Use the information above to answer the following questions. Be sure to show your work so you can recelve partial credit. a Calculate the Payback period for Project Pro V1. Assume the company mandates a payback period of 3.5 years or less. Do you accept the project based on payback - briefly exploin your answer? (6 points) b. Calculate the WACC for ABC, Inc. For the cost of equity component, calculate it using the DGM (Dividend Growth Model) we used in class. Check your Power Polnts or Excel Sheets if you aren't sure. (14 points) C. Calculate the NPV for Project Pro V1 (Hint: before you ask me about the disCount rate, I had you calculate WACC in part b for a reason). Do you accept the project based on NPV? - Briefly explain your answer. (10 points) question Completion Status: d. Define AND Explain the purpose of BOTH scenario analysis and sensitivity analysis in making capital budgeting decisions. (10 points) $250,000 $190,000 Accounts Payable $240.000 Notes Payable S700,000 Long-Term Debt $1,130,000 Total Liabilities S500,000 Equity Cash S75,000 $350,000 $675,000 S955,000 $1.630,000 Accounts Receivable Inventory Current Assets Fixed Assets Total Liabilities & Equity Total Assets $1,630,000 80.00% Diviend Payout Dividend per Share $10,800,000 Price of Stock Today $5,520,000 Retention Ratio s0.75 $39.50 20.00% Sales Cost of Goods Sold Gross Profit 25.13% $5,280,000 ROE You need to Calculate You need to Calculate 4.50% Selling & Admin. Expenses $3,360.000 Growth Rate Depreciation EBIT Interest Expense Taxable Incorne Taxes 20% $600,000 D1 $1,320,000 Coupon Rate $1,020.000 Tax Rate $300,000 Se0.000 240.000 20.00% Net Income Project Prov1 Time $70,000 $75,000 s8o,000S75,000 Cash Flows -$275,000