Page Project 2 Calculations must be done in Excel - You must create your own spreadsheet (do not copy and paste someone else's). This question should be done using Method 1 as outlined in lecture 6 (i.e. Tax Effects, then Cash Flows then NPV). As the financial advisor to All Star Manufacturing you are evaluating the following new investment in a manufacturing project: - The project has a useful life of 8 years. . Land costs $12m and is estimated to have a resale value of $25m at the completion of the project. Buildings cost $12m, with allowable depreciation of 8% pa reducing balance and a salvage value of $10m. Equipment costs $5m, with allowable depreciation of 15% pa reducing balance and a salvage value of $1m. An investment allowance of 20% of the equipment cost is available. Revenues are expected to be $14m in year one and rise at 5% pa due to growth Cash variable costs are estimated at 35% of revenue. Cash fixed costs are estimated at $3.5m pa. The firm has spent $2m on research and development for the project. Managerial salaries of $900,000 will be allocated to the project, but these managerial positions will be unaffected by the acceptance of the project. An amount of $200,000 has been spent on a feasibility study for the new project. The project is to be partially financed with a loan of $14m to be repaid annually with equal instalments at a rate of 3% pa over 8 years. Except for initial outlays, assume cash flows occur at the end of each year. The tax rate is 30% and is payable in the year in which profit is earned. . The after-tax required return for the project is 12% pa. Required (a) Calculate the NPV Is the priest accentable? Why or why not? Explain and defend your processes