Description ATSV = Market Value - Tax Rate (Market Value - Book Value) CFA = OCF-CHANGE IN NWC- NCS Instructions ATSV = Market Value - Tax Rate (Market Value - Book Value) CFA = OCF-CHANGE IN NWC- NCS Question 2 15 points ABC Incorporated wants to start a new business to manufacture widgets. The equipment to manufacture the widgets costs $2,000,000 and is designated as a 7-year MACRS property (14,29%; 24.49%, 17.49%; 12.49%; 8.93%; 8.93%; 8.93%; 4.45%). The salvage value is 0% of the cost of the project. You estimate that Sales will be: 1,000; 1250, 1600, 1550, 1525, 1,700, 1850, 1,900 and 2,100 units each year. The price per unit will be $350 in years 1-2; $275 in years 3 - 4; $300 in years 5 - 8 and 150 in the last year. Fixed Costs are $75,000 each year, Variable Costs are $50 per unit in years 1 - 3; $75 per unit in the in years 4-7 and S10 per unit in the last year. The initial NWC required is $100,000 and NWC will be 10% of Sales in years 1 - 4;0% of sales in years 5 and 6 and 12% of sales in the remaining years. Assume that taxes are 18% and the cost of capital is 6.25%. Find NPV and IRR. Attach File Com Brown Content Collection BS F RYO 5 di 100% .00 123- Default (Art- 10 BISA . A22 fx - D A D 1 2 3 4 5 Cost of project Units Price/Units VC Depreciation NWC Taxes 6 7 B 9 10 11 12 13 15 Sales VC FC DEP EBIT DEP TAXES OCF ATSV Addition to NWC CFA NWC 16 17 18 19 20 Sic i 22 23 24