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: Year 3 Year 1 3,500 Year 4 4,250 Year 2 4,000 $39.88 $22.85 Unit sales Sales price Variable cost per unit Fixed operating costs $41.55 4,200 $40.15 $23.67 $38.50 $22.34 $37,000 $23.87 $39,560 $37,500 $38,120 This project will require an investment of $20,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation at t = 0, so it will be fully depreciated at the time of purchase. The equipment will have no salvage value at the end of the project's four-year life. McFann pays a constant tax rate of 25%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's net present value (NPV) would be under the new tax law. Determine what the project's net present value (NPV) would be under the new tax law. O $51,486 O $59,209 O $46,337 O $61,783 Now determine what the project's NPV would be when using straight-line depreciation. Using the straight-line depreciation method will result in the highest NPV for the project