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Consider a project to supply Detrolt with 20.000 tons of machine screws annually for automobile production. You will need an initial $3,000,000 Investment in threading

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Consider a project to supply Detrolt with 20.000 tons of machine screws annually for automobile production. You will need an initial $3,000,000 Investment in threading equipment to get the project started the project will last for 4 years. The accounting department estimates that annual fixed costs will be $850,000 and that variable costs should be $450 per ton; accounting will depreciate the initial fixed asset Investment straight-ine to zero over the 4-year project life. It also estimates a salvage value of $280,000 after dismantling costs. The marketing department estimates that the automakers will let the contract at a selling price of $600 per ton. The engineering department estimates you will need an initial net working capital Investment of $300,000. You require a return of 12 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 enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) b. Suppose you believe that the accounting department's initial cost and salvage value projections are accurate only to within 215 percent: the marketing department's price estimate is accurate only to within 210 percent and the engineering department's net working capital estimate is accurate only to within 35 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 enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g. 1,234,567.89.) 1 a-1 OCF a-2. NPV Worst-case NPV Best-case NPV b

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