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please solve parts a-d. or any of them possible. will quipment's bavaluate the pr increasas old at the end rice is $1,200.000 acquisition of and

image text in transcribedplease solve parts a-d. or any of them possible.

will quipment's bavaluate the pr increasas old at the end rice is $1,200.000 acquisition of and unit 0,000 units and Project's 2-year life for incrementannual net working-nual grow You are asked to evaluate the proposed acquisiti The equipment's base price is $1,200,000, and falls will be sold at the end of the project's 2-year life for increase 30,000 units and 15,000 units, respectively and unit cost is $25. And the annual growth rates for unit 5%. The annual net working capital (NWC) requ incremental revenue. The firm's tax rate is 21 p W0,000, and falls into the MACRS 7-year asset class. The equip an equipment for a 2-year expansion project. year life for 65% of its base price. The project is expected to s, respectively, in Years 1 and 2. The current unit price is $40 win rates for unit price and unit cost are, respectively, 4% and (NWC) requirement is set at 10% of the following year's percent, the appropriate discount rate is 12% (a) Calculate the initial cash flow of the project. Calculate the NOVINAE cash flows for Years 1 and 2. (Note: Year 2's NOMINAL OCF is given as only need to calculate Year I's NOMINAOC (c) Numerically justify your invest TONINAE OCF is given as $247.700 for your use in your calculation such that you Tale Tear I'S NOMINA OCF and the NOMINALCFs for BOTH years!) ally Justify your investment decision on this project using the conceptually most correct ou per the firm's objective. Explain precisely your investment decision! our manager reminds you that the team spent $300.000 on the pilot test, which was completed last quarter, for the project. Explain precise er, for the project. Explain precisely why you should/should not (circle one) include this piece of information in your cash flow estimation. (21%) SHOW YOUR CALCULATIONS

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