INPUT AREA ($000) MACRS-7 YR Land sale value-current (opportunity value) Land salvage (sale) value Equipment Equipment salvage value AWNH Net WC investment-% of incremental sales Price / tor Tons (Thousands): AWNI Variable costs / ton Annual fixed costs Communication expense-year 1 Reclaim. Costs-year 5 Reclaim. Costs-year 6 Interest Tax rate OUTPUT AREA BIG HOLE CAPITAL PROJECT ($000) Investments 0 2 3 5 6 Land @ sale value Equipment Net working capital @ 5% Total investment Operating Cash Flows Units (thousand tons) Sales $ Variable costs per ton Annual Fixed costs Communication costs Reclaiming costs (after tax) Depreciation EBIT Interest Taxable Income Taxes Net Income Add back depreciation Add back interest Total operating cash flow Termination Recoveries (after tax) Return of net working capita Equipment net salvage value and net sale value Total termination cash flow Net Cash Flow NPV @15 % hurdle rate IRR B. Based only on your financial analysis should BH go ahead with this project? Why? C. Explain and illustrate what further analyses of this project you would recommend