Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs Year 2 Unit Sales Sales price Year 1 4,800 $22.33 $9.45 $32,500 5,100 $23.45 $10.85 $33,450 Year 3 Year 4 5,000 5,120 $23.85 $24.45 $11.95 $12.00 $34,950 $34,875 Variable cost per unit Fixed operating costs This project will require an investment of $25,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation at -0, so will be fully deprecated at the time of purchase. The equipment will have no salvage value at the end of the project's four year life. Fox pays a constant tax rate of 25%, and it has a weighted average cost of capital (WACC) of 11%, Determine what the project's net present value (NPV) would be under the new tax law Determine what the project's net present value (NPV) would be under the new tax law 554,677 38.036 547, 545 542,791 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 it 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 $600 for each year of the four-year project? $1,861 $1,582 $1,396 51,117 Fox spent 51.500 on a marketing study to estimate the number of units that it can sell each year. What should Fox do to take this information into account Increase the NPV of the project $1.500 increase the amount of the investment by $1,500 The company does not need to do anything with the cost of the marketing study because the marketing study is a funkcost