Bernie has also told you that as a result of producing 10 and 12 pipes in house your sales of existing 3' pipes are likely to increase. The current equipment used to produce the 3' pipes can easily accommodate the increased production of the 3' pipe, so OLP would not need to purchase new equipment. Bernie provided you with several estimates of Taxable Income or EBIT (earnings before interest and tax) associated with the increased sales of 3' pipes: there is a 25% chance of $5,000 increase, 50% of $10,000 increase, 25% of $35,000 increase. Bernie thinks that it is best to use the most likely outcome and he said that these incremental profits will occur each year of the new projects life (remember the project has a 5 year life). Remember, financing costs are $8,000, tax rate is 40% and the WACC is 15%. Would this influence the NPV of producing 10 and 12 pipes in-house? If so, how?

Group of answer choices

Yes, this would increase the NPV of this project by about $75,000, given the $15,000 annual increase in Sales in each of the next 5 years

Yes, this would increase the NPV of this project by about $30,169, given the $15,000 annual increase in Taxable Income

Yes, this would increase the NPV of this project by about $33,522, given the $10,000 annual increase in Taxable Income

Yes, this would increase the NPV of this project by about $50,000, given the $10,000 most likely increase in Sales in each of the next 5 years

Yes, this would decrease the NPV of the project related to the production of the 10 and 12 pipes in-house as it would increase the sales of other pipes by $15,000 per year

No, this would not influence the NPV of this project as only the changes to the 10 and 12 pipes should be taken into account

Yes, this would increase the NPV of this project by about $50,282, given the $15,000 annual increase in Taxable Income