Consider a project to supply Detroit with $25,000$ tons of machine screws annually for

automobile production. You will need an initial $$2,000,000$ investment in threading

equipment to get the project started; the project will last for $5$ years. The accounting

department estimates that annual fixed costs will be $$435,000$ and that variable costs

should be $$290$ per ton; accounting will depreciate the initial fixed asset investment

straight$-$line to zero over the $5-$year project life. It also estimates a salvage value of

$$220,000$ after dismantling costs. The marketing department estimates that the

automakers will let the contract at a selling price of $$360$ per ton. The engineering

department estimates you will need an initial net working capital investment of

$$200,000.$ You require a return of $11$ percent and face a marginal tax rate of $21$ percent

on this project.

a$-1.$ What is the estimated OCF for this project? $($Do not round intermediate

calculations and round your answer to the nearest whole number, e$.$g$.,32.)$

a$-2.$ What is the estimated NPV for this project? $($Do not round intermediate

calculations and round your answer to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89.)$

b$.$ Suppose you believe that the accounting department's initial cost and salvage value

projections are accurate only to within $+-15$ percent; the marketing department's

price estimate is accurate only to within $+-10$ percent; and the engineering

department's net working capital estimate is accurate only to within $+-5$ percent.

What is the worst$-$case NPV for this project? The best$-$case$-$NPV$?($A negative

answer should be indicated by a minus sign. Do not round intermediate

calculations and round your answer to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89.)$

Answer is complete but not entirely correct.