Green, Inc. is a recently organized firm that engages in recycling of consumer goods. With the increased interest among many in recycling and preserving the environment, Green, Inc. has experienced rapid growth during the years it has been in operationg. Green, Inc. is considering constructing a new recycling plant in the San Francisco, California area. Although volume for this plant is projected to be very high, the project has a negative Net Present Value of ($1,150,000) currently. A key factor affecting this negative NPV is the high cost of land in the San Francisco area. The initial NPV analysis was calculated based on a seven- year time-frame. However, as newly-hired Financial Analysts for Green, Inc., you believe that you can apply the dividend growth model" to this project. Your group is quite certain that this analysis will have a significant impact on the project's NPV. Data that your group compiles for use in the "dividend growth model" is as follows: the after- tax cash flow in Year Eight is estimated to be $575,000; the project's required rate of return is 15%; and the projected annual growth rate in the project's cash flows beyond Year Eight is estimated to be 10% 1) Using the dividend growth model," calculate the Terminal Value (TV) of this project as of the end of Year Seven. a. What is the present value (PV) at t= 0 of this Terminal Value (TV), based on the project's required rate of return (i.e., its Weighted Average Cost of Capital - WACC) of 15%? b. What is the project's revised Net Present Value (NPV), taking the present value of the project's Terminal Value (TV) into account in your calculation of NPV? . At this revised NPV, would your group recommend that Green, Inc, approve this project? Why or why not? 2. Now assume that the Year Eight cash flow is expected to be $250,000, rather than the previous estimate of $575,000. Re-calculate the project's NPV based upon this revised Year Eight cash flow value. a. Given this revised Year Eight cash flow estimate, and the resulting revised TV and NPV, should this project now be accepted by Green, Inc.? Why or why not