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pleases solve the question with this formulas You are evaluating a project for your company. You estimate the sales price to be $400 per unit

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pleases solve the question with this formulas
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You are evaluating a project for your company. You estimate the sales price to be $400 per unit that is expected to increase by 5% per year and sales volume to be 55 thousand units in year 1;80 thousands units in year 2 ; and 90 thousands units in year 3. The project has a three-year life. Variable costs amount to $200 per unit and fixed costs charged by Head office are $500,000 per year. The project requires an initial investment of $30 million in assets which will be depreciated straight-line to 50 thousand over the three-year project life. The actual market value of these assets at the end of year 3 is expected to be $145,000. NWC requirements at the beginning of each year will be approximately 10 percent of the projected sales during the coming year. The tax rate is 21 percent. To finance this project, the company issued two million shares of common stock outstanding and selling at $25 per share and 7,000 bonds. The bond is offered at 6% coupon bond with 15 years to maturity and sold at 97% per cent (semiannual). The Industry beta of similar firms is 1.59, the current risk-free rate is 4.09 percent, and the expected return on the market is 12 percent. Requirements: 1. Calculate the Net Present Value (NPV) of this project. Round the discount factor to the nearest 3 decimals. (11 Marks) 2. Advise the company on the project and outline other factors that you would take into consideration in your decision. ( 5 Marks) 3. Briefly explain why discounted cash flow analysis is appropriate when evaluating long-term projects, (4 Marks) 1 Rereoue 5$5$5 2 operating Cost 5 s 5,5 s Ensure what rou input here micets with the constiont of (1.Te) Book value is calculuted as / Coit of wivestroent- Acrumulated Depreciarion) Acrumulated bepecigsion is midire up al deprecution of all vears The number is uwaly warred at the end of the lint year of project 11 Saluge value revd 1210 s is s s is i forivenot11 13 Divceunt las 1x is x x x Mand as the year MrVa adi ail the PV consisenine the isent

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