Please Please help me. I really appreciate it! 
McFann Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs Year 1 Year 2 Year 3 Year 4 3,400 $17.25 $17.33 $17.45 $18.24 $9.06 Fixed operating costs except depreciation $12,500 $13,000 $13,220 $13,250 7% Unit sales Sales price Variable cost per unit 3,000 3,250 3,300 $8.88 $8.92 $9.03 Accelerated depreciation rate 33% 45% 1 5% This project will require an investment of $10,000 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 O $24,671 O $18,503 O $16,44:7 O $20,559 Now determine what the project's NPV would be when using straight-line depreciation Using the depreciation method will result in the highest NPV for the project 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? $1,846 O $2,172 O $2,389 O $1,629 McFann spent $1,500 on a marketing study to estimate the number of units that it can sell each year. What should McFann do to take this information into account? Increase the amount of the initial investment by $1,500 O The company does not need to do anything with the cost of the marketing study because the marketing study is a sunk cost. Increase the NPV of the project $1,500 . The new equipment will have a cost of $9,000,000, and it will be depreciated on a straight-line basis over a period of six years (years 1-6) . The old machine is also being depreciated on a straight-line basis. It has a book value of $200,000 (at year 0) and four more years of depreciation left ($50,000 per year) . The new equipment will have a salvage value of $0 at the end of the project's life (year 6). The old machine has a current salvage value (at year 0) of $300,000 . Replacing the old machine will require an investment in net working capital (NWC) of $50,000 that will be recovered at the end of the project's life (year 6) .The new machine is more efficient, so the firm's incremental earnings before interest and taxes (EBIT) will increase by a total of $600,000 in each of the next six years (years 1-6). Hint: This value represents the difference between the revenues and operating costs (including depreciation expense) generated using the new equipment and that earned using the old equipment The project's cost of capital is 13% The company's annual tax rate is 30% Complete the following table and compute the incremental cash flows associated with the replacement of the old equipment with the new equipment Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Initial investment EBIT - Taxes + New depreciation - Old depreciation + Salvage value - Tax on salvage - NWC + Recapture of NWC Total free cash flow $600,000 $1,920,000 The net present value (NPV) of this replacement project is: O -$1,229,412 -$1,045,000 O -$1,475,294 O -$1,413,824
