FORMULA APPROACH ONLY- No Excel or Calculator

Holmes Manufactunng is considering a new machine that costs $270,000 and would reduce pretax manufacturing costs by $90,000 annually. The new machine will be fully depreciated at the time of purchase. Management thinks the machine would have a value of $20,000 at the end of its 5 -year operating life, Net operating working capital would increase by $26,000 intally, but it would be recovered at the end of the project's 5 -year lfe. Holmes's marginal tax rate is 25%, and a 10% WACC is appropriate for the project. a. Calculate the tronect's NPY. Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest cent. 5 Calculate the broject's 1RR. Do not round intermediate calculations. Pound your answer to two decimal places. a Calculate the nroject's MIRR. Do not round intemediate calculations. Round your answer to two decimal places. 96 Calculate the nropect's payback. Do not round intermediate calculations, fhound your answer to two decamal places. years b. Assume management is unsure about the $90,000 cost savings-thas figure could deviate by as much as plus or manus 20%. What would the Niv be under each of these situations? Negative values, if any. should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent. 20\% savings increase: 5 20% savings decrease: 5 c. Suppose the Cro wants you to do a scenano analysis with different values for the cost savings, the mochine's salvage value, and the net operating working capatal (NOWC) requirement, She asks you to use the following probabilities and values in the scenario analysis: C. Suppose the CFO wants you to do a scenario analysis with different values for the cost savings, the machine's salvage value, and the net operating working capitat (NOWC) requirement. She asks you to use the following nrokahilisioe and values in the scenarno analysis: Calculate the project's expected NPY, its standard deviation, and its coefficient of variation, Negative values, if any, should be indicated by a minus sign, Do not round intermediate calculations. Round your answer for expected NPV and for standard deviation to the nearest cent and for coefficient of variation to two decimal places. E(NPV):eray:CV:$$ Would you recommend that the project be accepted