please answer both a and b please!!!

Year 0 2 3 4 5 50 10% 20% 50 260 120 100 234.00 96.00 150 210.60 76.80 200 189.54 6144 HomeNet Units Sales (000s) Sales Price (S/unit) Cost of Goods Sold (S/unit) Operating Expenses (5000s) Hardware & Software Develop Marketing & Technical Support Capital Expenditures Lab Equipment Depreciation Corporate Tax Rate (15,000) (2,800) (2,800 2.800) (2.800) (7,500) 100% 20% 20% 20% 2096 20% Year 0 1 2 3 4 13,000 (6,000) 7,000 (2.800) 23,400 (9.600) 13,800 (2,800) 31,590 37 908 (11.520) (12.288) 20,070 25.620 (2.800) (2.800) Incremental Earnings Forecast (5000) 1 Sales 2 Cost of Goods Sold 3 Gross Profits 4 Selling. General and Administrative 5 Research and Development 6 Depreciation 7 EBIT 8 Income Tax at 20% 9 Unlevered Net Income Free Cash Flow (5000) 10 Plus Depreciation 11 Less: Capital Expenditures 12 Less Increases in NWC 13 Free Cash Flow (15,000) (7.500) (22.500) 4,500 (18,000) 4,200 (840) 3,360 11,000 (2.200) 8,800 17 270 (3.454) 13,816 22.820 (4,564) 18 256 7.500 (7.500) (1.050) 2,310 (1,020) 7.780 (941) 12,875 (832) 17.424 (18.000) 3.843 Year 0 1 2 3 4 5 (18,000) 2,310 7.780 12,875 17 424 3,843 Net Present Value (5000) 1 Free Cash Flow 2 Project Cost of Capital 12% 3 Discount Factor 4 PV of Free Cash Flow 5 NPV 1.000 (18,000) 12,683 0.8929 2,063 0.7972 6,202 0.7118 9. 164 0.6355 11 073 0.5674 2,181 Homework: HW8 Question 6, P8-23 (similar to) Part 1 of 2 0 3 HW Score: 50%, 300 of 600 points O Points: 0 of 100 Save You are evaluating the HomeNet project under the following assumptions: new tax laws allow 100% bonus depreciation (all the depreciation expense, 7.5 milion occurs when the asset is put into use in this case immediately). Research and development expenditures total $15 million in year and selling generaland administrative expenses are 52.8 million per year (assuming there is no cannibalization) Also assume HomeNet will have no incremental cash or Inventory requirements (products will be shipped directly from the contract manufacturer to customers) However, receivables related to HomeNet are expected to account for 15% of annual sales and payables are expected to be 15% of the annual cost of goods sold. Under these assumptions and assuming a cost of capital of 12% calculate a. The break-even annual sales price decline If sales of 50,000 units in year 1 increase by 50.000 units per year over the We of the project, the year 1 sales price is $260/unit, and the year I cost of $120/unit decreases by 20% annually. See b. The break-even annual unit sales increase it sales are 50,000 units in year 1, the year 1 sales price of $260/unit decreases by 10% annually and the year 1 cost of $120/unit decreases by 20% annually. See 55 a. The break even annual sales price decline if sales of 50.000 units in year 1 increase by 50,000 units per year over the Ife of the project the year 1 sales price is 5260/unit and the year 1 cost of $120/unit decreases by 20% annually See m The break-even annual sales price decline is Us (Round to two decimal places Year 0 2 3 4 5 50 10% 20% 50 260 120 100 234.00 96.00 150 210.60 76.80 200 189.54 6144 HomeNet Units Sales (000s) Sales Price (S/unit) Cost of Goods Sold (S/unit) Operating Expenses (5000s) Hardware & Software Develop Marketing & Technical Support Capital Expenditures Lab Equipment Depreciation Corporate Tax Rate (15,000) (2,800) (2,800 2.800) (2.800) (7,500) 100% 20% 20% 20% 2096 20% Year 0 1 2 3 4 13,000 (6,000) 7,000 (2.800) 23,400 (9.600) 13,800 (2,800) 31,590 37 908 (11.520) (12.288) 20,070 25.620 (2.800) (2.800) Incremental Earnings Forecast (5000) 1 Sales 2 Cost of Goods Sold 3 Gross Profits 4 Selling. General and Administrative 5 Research and Development 6 Depreciation 7 EBIT 8 Income Tax at 20% 9 Unlevered Net Income Free Cash Flow (5000) 10 Plus Depreciation 11 Less: Capital Expenditures 12 Less Increases in NWC 13 Free Cash Flow (15,000) (7.500) (22.500) 4,500 (18,000) 4,200 (840) 3,360 11,000 (2.200) 8,800 17 270 (3.454) 13,816 22.820 (4,564) 18 256 7.500 (7.500) (1.050) 2,310 (1,020) 7.780 (941) 12,875 (832) 17.424 (18.000) 3.843 Year 0 1 2 3 4 5 (18,000) 2,310 7.780 12,875 17 424 3,843 Net Present Value (5000) 1 Free Cash Flow 2 Project Cost of Capital 12% 3 Discount Factor 4 PV of Free Cash Flow 5 NPV 1.000 (18,000) 12,683 0.8929 2,063 0.7972 6,202 0.7118 9. 164 0.6355 11 073 0.5674 2,181 Homework: HW8 Question 6, P8-23 (similar to) Part 1 of 2 0 3 HW Score: 50%, 300 of 600 points O Points: 0 of 100 Save You are evaluating the HomeNet project under the following assumptions: new tax laws allow 100% bonus depreciation (all the depreciation expense, 7.5 milion occurs when the asset is put into use in this case immediately). Research and development expenditures total $15 million in year and selling generaland administrative expenses are 52.8 million per year (assuming there is no cannibalization) Also assume HomeNet will have no incremental cash or Inventory requirements (products will be shipped directly from the contract manufacturer to customers) However, receivables related to HomeNet are expected to account for 15% of annual sales and payables are expected to be 15% of the annual cost of goods sold. Under these assumptions and assuming a cost of capital of 12% calculate a. The break-even annual sales price decline If sales of 50,000 units in year 1 increase by 50.000 units per year over the We of the project, the year 1 sales price is $260/unit, and the year I cost of $120/unit decreases by 20% annually. See b. The break-even annual unit sales increase it sales are 50,000 units in year 1, the year 1 sales price of $260/unit decreases by 10% annually and the year 1 cost of $120/unit decreases by 20% annually. See 55 a. The break even annual sales price decline if sales of 50.000 units in year 1 increase by 50,000 units per year over the Ife of the project the year 1 sales price is 5260/unit and the year 1 cost of $120/unit decreases by 20% annually See m The break-even annual sales price decline is Us (Round to two decimal places