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Please help me with both! thank you TexMex Food Company is considering a new salsa whose data are shown below. Under the new tax law,

image text in transcribedimage text in transcribedPlease help me with both! thank you

TexMex Food Company is considering a new salsa whose data are shown below. Under the new tax law, the equipment to be used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = o. At the end of the project's life, the equipment would have zero salvage value, and no change in net operating working capital (NOWC) would be required for the project. Revenues and operating costs are expected to be constant over the project's 3-year life. However, this project would compete with other TexMex products and would reduce their pre-tax annual cash flows. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.) Do not round the intermediate calculations and round the final answer to the nearest whole number. WACC 10.0% Pre-tax cash flow reduction for other products (cannibalization) $4,000 Equipment cost $180,000 Annual sales revenues $70,000 $25,000 Annual operating costs Tax rate 25.0% O a. -$30,552 O b. -$50,882 O c. -$103,529 O d. -$46,257 Oe. -$58,529 Fool Proof Software is considering a new project whose data are shown below. The equipment that would be used has a 3-year tax life, and the allowed depreciation rates for such property are 33.0%, 45.0%, 15.0%, and 7.0% for Years 1 through 4. Under the new tax law, the equipment used in the project is eligible for 100% bonus depreciation, so it will be fully depreciated at t = 0. Revenues and other operating costs are expected to be constant over the project's 10-year expected life. What is the Year 1 cash flow? Equipment cost $55,000 Sales revenues, each year $73,700 Operating costs $15,600 Tax rate 25.0% O a. $44,538 b. $43,575 0 C. $61,725 O d. $58,100 O e. $48,113

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