Companies invest in expansion projects with the expectation of increasing the earnings of its business. Consider the case of McFann Cot McFann Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 1 4,200 $29.82 $30.00 Year 2 4,100 $12.15 $13.45 $41.000 $41.670 33% 45% Unit sales Sales price Variable cost per unit Fixed operating costs except depreciation Accelerated depreciation rate O $52.898 $42.318 This project will require an investment of $10,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year 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. O $63,478 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.) $47.608 Year 3 4.300 Now determine what the project's NPV would be when using straight-line depreciation. $1.396 $30.31 $14.02 $41,890 15% $1,861 $2.047 Year 4 4,400 Using the 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 $600 for each year of the four-year project? O $1.117 $33.19 $14.35 $40,100 7% depreciation method will result in the highest NPV for the project.