pls do it asap and show ur work

O QUESTION 1: (25 marks) a) P.D. Corporation is considering the purchase of a high-speed lathe that has an invoic price of $250,000. The cost to ship the lathe to P.D.'s factory is $10,000, and the existing facilities will require modifications that are expected to cost $20,000. The machine will be depreciated on a straight-line basis over its useful life of 10 years, assuming no salvage value. P.D. Corporation is planning on paying for the lathe using a line of credit at the bank that has an interest rate of 6 percent per year. The lathe is expected to Increase production and sales. Sales are expected to increase by $100,000 per year. Inventory and accounts receivable balances are expected to increase by $10,000 and $20,000 respectively. Expenses to operate the lathe are $25,000 per year. P.D.'s marginal tax rate is 40%. 1 Calculate the initial outlay required to fund this project. Calculate the incremental after-tax cash flow in year one of the project. (4 marks) b) You have come up with a great idea for a Tex-Mex-Thai fusion restaurant. After doing a finan lan , sis of this venture, you estimate that the initial outlay will be 56 million. You also estimate that there is a 50 percent chance that this new restaurant will be well ered and will produce annual cash flows of $800,000 per year forever la perpetuity), e there is a 50 percent chance of it producing a cash flow of only $200,000 per year forever (a perpetuity if it isn't received well What is the NPV of the restaurant of the required rate of return you use to discount the project cash flows is 10 percent? (10 marks) (4 marks) - What are the real options that this analysis may be ignoring? Explain why the project may be worthwhile, even though you have just estimated that its NPV is negative 15 marks 12 marks