Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 1 Year 2 Year 3 Year 4 Unit sales 3,500 4,000 4,200 4,250 Sales price $38.50 $39.88 $40.15 $41.55 Variable cost per unit $22.34 $22.85 $23.67 $23.87 Fixed operating costs except depreciation $37,000 $37,500 $38,120 $39,560 Accelerated depreciation rate 33% 45% 15% 79% This project will require an investment of $15,000 in new Determine what the project's net present value (NPV) equipment. The equipment will have no salvage value a would be when using accelerated depreciation the end of the project's four-year life. Fox pays a O $43,099 constant tax rate of 40%, and it has a weighted average O $49,564 cost of capital (WACC) of 11%. Determine what the O 51,719 project's net present value (NPV) would be when using $34,479 O accelerated depreciation Now determine what the project's NPV would be when using straight-line depreciation. Using the depreciation method will result in the highest NPV for the project. No other firm would take on this project if Fox turns it down. How much should Fox 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 $300 for each year of the four-year project? 791 931 O 1,024 $559