Falcon Freight is considering an investment that will have the following sales, variable costs, and fixed operating costs:

This project will require an investment of $$20,000$ in new equipment. The equipment will have no salvage value at the end of the project's four$-$year

life. Falcon Freight pays a constant tax rate of $40\%,$ and it has a required rate of return of $11\%.$

When using accelerated depreciation, the project's net present value $($NPV$)$ is $$39,581$grad.

When using straight$-$line depreciation, the project's NPV is

Using the $-$ depreciation method will result in the greater NPV for the project.

No other firm would take on this project if Falcon Freight turns it down. How much should Falcon Freight 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?

$$1,582$

$$2,047$

$$1,117$

$$1,861$

Falcon Freight spent $$1,500\mathrm{.}00$ on a marketing study to estimate the number of units that it can sell each year. What should Falcon Freight do to take

this information into account?

Increase the amount of the initial investment by $$1,500\mathrm{.}00.$

Increase the NPV of the project $$1,500\mathrm{.}00.$