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McFann Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: This project will require an investment of

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McFann Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: This project will require an investment of $15,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. McFann pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's net present value (NPV) would be when using accelerated depreciation. Determine what the project's net present value (NPV) would be when using accelerated depreciation. Now determine what the project's NPV would be when using straight-line depreciation. No other firm would take on this project if McFann turns it down. How much should McFann reduce the NPV of this project if it discovered that this project would reduce one of its division's net after-tax cash flows by $700 for each year of the four-year project? The project will require an initial investment of $15,000, but the project will also be using a company-owned truck that is not currently being used. This truck could be sold for $12,000, after taxes, if the project is rejected. What should McFann do to take this information into account

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