Please see the attached document. I would like answers on excercise 1 and excercise 2 (only B part)

Universidad Interamericana de Puerto Rico Recinto de Ponce Programa Graduado Ejercicios de Prctica- BADM 5190 Nombre: _________________________ Prof. Diana Rivera Leccin 7 Fecha: ___________________________ Problema 1 The Fleming Company, a food distributor, is considering replacing a filling line at its Oklahoma City warehouse. The existing line was purchased several years ago for $600,000. The line's book value is $200,000, and Fleming management feels it could be sold at this time for $150,000. A new, increased capacity line can be purchased for $1,200,000. Delivery and installation of the new line are expected to cost an additional $100,000. Assuming Fleming's marginal tax rate is 40%, calculate the net investment for the new line. Problema 2 International Foods Corporation (IFC) currently processes seafood with a unit it purchased several years ago. The unit, which originally cost $500,000, currently has a book value of $250,000. IFC is considering replacing the existing unit with a newer, more efficient one. The new unit will cost $700,000 and will require an additional $50,000 for delivery and installation. The new unit will also require IFC to increase it's investment in initial net working capital by $40,000. The new unit will be depreciated on a straight-line basis over five years to a zero balance. IFC expects to sell the existing unit for $275,000. IFC's marginal tax rate is 40%. If IFC purchases the new unit, annual revenues are expected to increase by $100,000 (due to increased processing capacity), and annual operating costs (exclusive of depreciation) are expected to decrease by $20,000. Annual revenues and operating costs are expected to remain constant at this new level over the 5-year life of the project. IFC estimates that its net working capital investment, will increase by $10,000 per year over the life of the project. At the end of the project's life (5 years), all working capital investments will be recovered. After five years, the new unit will be completely depreciated and is expected to be sold for $70,000. (Assume that the existing unit is being depreciated at a rate of $50,000 per year). a. Calculate the project's net investment. b. Calculate the annual net cash flows for the project