Forever & more, Inc. recently hired a consultant to analyze the potential market growth as well as the pros and cons of expanding into the sale of health supplements to increase a persons longevity. The fee for the consultant was $25,000 The project requires an initial fixed asset investment (equipment) of $300,000 which will be depreciated in a straight-line manner to zero over the 3-year life of the project. You can sell the equipment at the end of the 3 years for $50,000. The NWC investment is $40,000. The product line is expected to generate sales of 65,500 units per year. Sales price per unit is expected to be $4. Variable costs are $2.00 per unit and fixed costs are $35,000 per year. If the tax rate is 35%and the companys required rate of return is 10% Should the company go forward with this project? Why? Show the four steps that we generated in class and then use at least 3 decision rules to answer the question: Should you invest in this project and why? The project requires a $300,000 initial fixed asset investment (equipment), which will be written down in a straight line over the course of three years. At the conclusion of the three years, you can sell the equipment for $50,000. The amount invested by NWC is $40,000 It is anticipated that the product line will sell 65,500 units annually. The projected selling price per unit is $4. $2.00 is the variable cost per unit, and $35,000 is the annual fixed cost. This project has a net present value of $172,950.65. The NPV favours moving through with the project. Please fill in the below charts to complete this problem.

Step 1

Sales:

-VC:

Grossprofit:

-FC:

-Dep:

EBIT:

-Taxes:

Net Income:

Step 2

Years 0 1 2 3

NWC:

NFA:

Total

Step 3

Ebit:

+Dep:

-Taxes:

OFC=

Step 4

Years 0 1 2 3

OFC:

NWC:

NFA:

tax rate

Totals