Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of McFann Co.: McFann Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: This project will require an investment of $20,000 in new equipment. The equipment will have no salvage value at the end of the projects life. McFann pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's net present value (NPV) would be when using accelerated depreciation. Now determine what the project's NPV would be when using straight-line depreciation. Using the depreciation method will result in the highest NPV for the 49,243 No other firm would take on this project if McFann turns it down. How much should MCF 51,212 project would reduce one of its division's net after-tax cash flows by $500 for each year 51,212. $1,551 $1,706 $1,318 Now determine what the project's NPV would be when using straight-line depreciation. Using the depreciation method will result in the highest NPV for the project. No other fi on this project if McFann turns it down. How much should McFann reduce the NPV of this project if it discovered that this project wo of its division's net after-tax cash flows by $500 for each year of the four-year project? $1,551$1,706$1,318$931 Determine what the project's net present value (NPV) would be when using accelerated depreciation. (Note: Round your intermediate calculations to the nearest whole number.) $47,683$31,789$45,696$39,736 Now determine what the project's NPV would be when using straight-line depreciation. Using the depreciation method will result in the highest NPV for the project. No other firm would take on this project if McFann turns it down. How much should McFann reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $500 for each year of the four-year project? $1,551$1,706$1,318$931