PLEASE SHOW YOUR WORK ON HOW TO CALCULATE THIS. NOT THROUGH EXCEL PLEASE, ON CALCULATOR.

Company XYZ is evaluating a project and here are some information for the project. The unit sales price is projected to be $40 and sales volume to be 1,000 units in year 1, 1,250 units in year 2, and 1,325 units in year 3. The project has a 3 year life. Variable costs amount to S22.5 per unit and fixed costs are $10,000 per year. The project requires an initial investment of $16,500, which is depreciated straight-line to zero over the 3 year project life. The actual market value of the initial investment at the end of year 3 is $3,500. Initial net working capital investment if $7,500 and NWC will maintain a level equal to 20% of sales each year thereafter. The tax rate is 34% and the required return on the project is 10%. 17. What is EBIT for the project in the first year? a. S 2,000 b. S 7,500 c. S11,375 d. S17,500 e. None of the above 18. Given the $7,500 initial investment in NWC, what change occurs for NWC during year 1? a. There is no change in NWC b. There is a $500 increase in NWC. c. There is a $500 decrease in NWC. d. There is an $8,000 increase in NWC. e. There is an $8,000 decrease in NWC. 19. What is the operating cash flow for the project in year 2? a. S_4.208 b. S 6.325 c. S 9,708 d. S11.875 e. None of the above 20. What is the effect of the $3.500 salvage value on year 2 cash flows? a. There is no effect because the salvage value is a noncash event. b. Cash flows are increased $2,310. c. Cash flows are increased $3.500 d. Cash flows are increased $4,180 e. Salvage value does not affect incremental cash flow until year 3