Calculate and interpret the operatingleverage of the project.

What other types of contingent planning should Matt and Chris include in their

report? Provide some rationale or explanation for your suggestions.

Hint: Refer to

chapter 7 of the Ross textbook.

C. Based on the analysis above, what is your recommendation? Should the firm go

ahead with the project or not? Justify your recommendation by highlighting the

key results of your analysis. Also, include any limitations of the analysis.

Table 1 Table 2 Modified ACRS Depreciation Allowances Year 5 -year year 1 14-29% 2 24-49% _17-49% 412-49% 5 8.93% 6 8.93% 8.93% 8 4.45% Note Term of project Initial Cost of equipment After 10 years equipment worth Leasing building cost Fixed cost Variable cost Initial additional cost Account payable increase by Account receivable Net working Capital WACC Interest expense Tax rate