der market, what would be a good "cost of aquity" or required return/discount rate to Wer At a 10% discount rate for each, what would be the NPV of each project? Which project should the firm do? Does the IRR rule work here? Explain.

At a 10% discount rate for each, what would be the NPV of each project? Which project should You are a manager in a firm that produces tractors and high-end agricultural equipment. Your company is deciding whether to pursue the development of a line of self-driving ploughs, which would be able to till large fields without the need for a farmer to be physically present in the cabin. Developing this technology would require a substantial initial investment of $80 million right away in new capital equipment. 9. In the first year of this project, you expect to have sales of $20 million. Variable costs will be 25% of sales, and fixed costs are $4 million. You can depreciate your equipment in a "straight-line," assuming a 10-year life (i.e. you can depreciate 10% of the purchase price each year). Your firm pays taxes at a 20\% rate. What will be your firm's "free cash flow" (also called cash flow from assets) in its first year operating? At a 10% discount rate for each, what would be the NPV of each project? Which project should You are a manager in a firm that produces tractors and high-end agricultural equipment. Your company is deciding whether to pursue the development of a line of self-driving ploughs, which would be able to till large fields without the need for a farmer to be physically present in the cabin. Developing this technology would require a substantial initial investment of $80 million right away in new capital equipment. 9. In the first year of this project, you expect to have sales of $20 million. Variable costs will be 25% of sales, and fixed costs are $4 million. You can depreciate your equipment in a "straight-line," assuming a 10-year life (i.e. you can depreciate 10% of the purchase price each year). Your firm pays taxes at a 20\% rate. What will be your firm's "free cash flow" (also called cash flow from assets) in its first year operating