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Companies invest in expansion projects with the expectation of increasing the eamings of its business. Consider the case of Garida Co: Garida Co. is considering

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Companies invest in expansion projects with the expectation of increasing the eamings of its business. Consider the case of Garida Co: Garida Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: This project will require on investment of $25,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecution at t=0, so it will be fully depreciated at the time of purchose. The equipment will have no salvage value at the end of the project's four-year life. Garida pays a constant tax rate of 25%, and it has a weighted overnge cost of capital (WACC) of 11%. Determine what the project's net present value (NPV) would be under the new tax low. Which of the following most dosely opproximates what the project's net present value (NPV) would be under the new tax law?(Hint: Round your final answer to two decimal ploces and choose the value that most closely matches your answer) 547,543.82 342,709.44 \$5A, 675.39 $57,052.58 Which of the of the following most closely approximates what the project's NPV would be when using straight-line depreciation? (Hint: Round your final answer to two decimal places and choose the value that most closely matches your answer.) $57,676.74 553,062.60 $46,141.39 543,834.32 Using the depreciation method will result in the highest NPV for the project. No other firm would take on this project if Garida turns it down. Which of the following most closaly approximates how much Garida should reduce the NPV of this project, assuming it is discovered that this project would reduce one of its division's net after-tax cash flows by $300 for each year of the four-year project? (Hint: Round your final answer to two decimal places and choose the value that most closely matches your answer.) $1,023.80 $791.12 5698.05 $930.73 The project will require an initial investment of $25,000, but the project will also be using a company owned truck that is not currently being used This truck could be sold for 59,000 , after toxes, if the project is rejected. What should Garida do to take this information into account? The company does not need to do anything with the value of the truck because the truck is a surk cost. Increose tho NPV of the project by $9,000. Increase the amount of the initiol investment by $9,000

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