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Calculate the NPV of the following project Cost Shipping Installation Salvage Value Econ Life $1,250,000 $50,000 $125,000 $100,000 4 Years MACRS Basis 3 Years $1,425,000

Calculate the NPV of the following project Cost Shipping Installation Salvage Value Econ Life $1,250,000 $50,000 $125,000 $100,000 4 Years MACRS Basis 3 Years $1,425,000 10,000 $200 $100 Depreciation 1 33.33% 2 44.45% 3 14.81% 4 7.41% 2% Annual Unit Sales Price / Unit Cost / Unit Inflation Net Working Capital Tax Rate Project WACC Opportunity Cost (lease) Externalities (canibalism) 15% (Sales-1) 40% 12% $75,000 $300,000 Sales $45,000 OCF $120,000 OCF

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