Manara dairy is considering a new 3-year project. The necessary equipment for the project could be purchased for $30,000 and shipping and installation costs are another $15,000. This project will increase the net working capital by $15,000. The equipment will depreciate at a rate of 25% and would be sold for $16,000 after 3 years The below is an expected information about the project In addition, Fixed costs expected to be 2,000$ each year, the applicable tax rate is 40%, and the project WACC is 10%.

The below is an expected information about the project

1. the Initial Cash Outlay is *

a. $60,000

b. $45,000

c. $30,000

d. $15,000

e. None of the above

2. The project's cash flow at t = 1 *

a. $39,000

b. $24,000

c. $17,700

d. $17,000

e. None of the above

3. The project's cash flow at t = 2 *

a. $54,000

b. $24,900

c. $36,000

d. $34,000

e. None of the above

4. Depreciation for year 2 is *

a. $22,500

b. $11,250

c. $15,000

d. $10,000

e. None of the above

5. The book value is *

a. $45,000

b. $33,750

c. $16,000

d. $11,250

e. None of the above

6. The terminal value is *

a. $16,000

b. $14,100

c. $16,000

d. $29,100

e. None of the above

7. The Terminal Cash Flow at t = 3. *

a. $26,340

b. $55,440

c. $39,000

d. $37,000

e. None of the above

8. The expected net present value (NPV) of the new business is *

a. -$18,322

b. $78.322

c. -$78,322

d. $18,322

e. None of the above

Year 1 2 3 Units Sold 600 900 800 Price/Unit $65 $60 $70 Variable Cost/Unit $25 $20 $22