just the 4 questions

Majestic Mulch and Compost Co. (MMCC) is investigating the feasibility of a new line of power mulching tocls aimed at the growing number of home composters. -The new power mulcher will be priced to sell at $120 per unit to start. When the competition catches up after three years, however, MMC anticipaices that the price will drop to $110 -The power mulcher project will require $20,000 in Net Working Capital (NWC) at the start. Subsequently, total net working capital at the end of each year will be about 15% of sales for that year. It will cost about $800,000 to buy the equipment necessary to begin production. It will have an 8 year depcreciable life (see depreciation schedule). The equipment will have a salvage value of 20% of its cost after 8 years. This salvage value will be subject to a 34% tax. -The relevant tax rate for this whole analysis is 34% and the relevant required return is 15%. - Variable costs per unit are $60 and fixed costs per year are $25,000. -Should this company proceed with this project? Why? -What is the relationship between the NPV of this project and the IRR? -What would the NPV of this project be if, instead of a required rate of return of 15%, the required rate of return was 20%6 ? If the required rate of return is 20%, would you still recommend proceeding with the project? Why or why not? Projected cash flows, power mulcher project 45 46 Rlequired Rate of Return: 47 NPV: 4B IRR: 49 Payback 565,48815.00817.24%4.08 Depreciation Schedule Equipment $800,000 Year Revenues Net Working Capital Cash Flow 015234565360,000600,000720,000715,000660,000550,00020,00054,00090,000108,090107,25094,00082,500$(34,000)(36,000)(18,000)2508,25016,500(20,000) Fects and Assignewent Tog thend Delail thet Working Capital Alevew