Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 1 Year 3 Year 4 Year 2 5,100 5,000 5,120 4,800 $22.33 $23.85 $24.45 Sales price Venable cost per unit $9.45 $10.05 $11.95 $12.00 $34,875 Find operating costs $32,500 $33,450 $34,950 This project will require an investment of $15,000 in new equipment. Under the new tax lew, the equipment is eligible for 100% bonus deprecation at 1-0, so it will be fully depreciated at the time of purchase. The equipment will have no salvage value at the end of the project's four year ide. Fox peysa 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 not present value (NPV) would be under the s O$55,045 O $64,054 8 144,00 O $63,302 470,464 647,754 Using the depreciation method will result in the highest Ny for the would reduce an 's not after tes cash flows by $500 for each year the O $1,551 Determine what the project's net present value (NPV) would be under the new tax law $55,045 $66,054 O $44,036 $63,302 Now determine what the project's NPV would be when using straight-line depreciation. Using the straight-line No other t would redu bonus depreciation method will result in the highest NV for the project. n this project if Fox turns it down. How much should Fox reduce the NPV of this project if it discovered that this project son's net after-tax cash flows by $500 for each year of the four-year project? year What should for de to take this information Save & Continue O $1,551 O $1,318 O $1,706 $931 Fox spent $2,750 on a marketing study to estimate the number of units that account? The company does not need to do anything with the cost of the marketing study because the marketing study O Increase the NPV of the project $2,750, O Increase the amount of the intal investment by $2,750 Grade It Now