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please show all work and explain, forumlas etc. No shortcuts Question 20 (4 points) Your local fast-food chain finds that labor costs are too high,

please show all work and explain, forumlas etc. No shortcuts
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Question 20 (4 points) Your local fast-food chain finds that labor costs are too high, and is considering buying a kiosk, which will cost $100,000. The efficiency of the kiosk will increase unit sales on average by 50,000 per year for the next five years. The unit sales price is $3, variable costs are $2/unit, and fixed costs for maintenance are $10,000/year. Also, changes in NWC is $12,000, but will be reclaimed at the end of the project. Tax rate is 30%. Required return is 20%. Depreciation is straight-line, no salvage. What is the OCF (Please show your work) Assuming a required return of 20%, should you accept or reject this project? Please calculate both NPV and IRR (Please show all work). AJ

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