Problem #2: (Project Profitability Analysis - 1) A plant is designed to produce 10,000 t/year of product. Total fixed capital investment is $2,500,000 and the plant operates about 8,400 h/yr. Working capital is 5% of annual sales revenue. It is a highly automated continuous process involving four processing steps. Plant overhead is 50% of labor payroll. Supervision cost is $80,000 per year. Repairs and maintenance cost is 10% of FCI for the first year and then increase by $50,000 each year. The plant life is 10 years, and the company accountant uses the sum-of-the-years' digits method for depreciation. Salvage value of the plant is 10% of FCI. Selling and distribution costs are $100 per ton of product. General overheads are 10% of sales revenue. Use tax rate of 25%. Recall that federal corporate tax was reduced from 34% to 21%. The added burden is due to state taxes. Assume 1 year of construction. Problem #2: (Project Profitability Analysis - 1) A plant is designed to produce 10,000 t/year of product. Total fixed capital investment is $2,500,000 and the plant operates about 8,400 h/yr. Working capital is 5% of annual sales revenue. It is a highly automated continuous process involving four processing steps. Plant overhead is 50% of labor payroll. Supervision cost is $80,000 per year. Repairs and maintenance cost is 10% of FCI for the first year and then increase by $50,000 each year. The plant life is 10 years, and the company accountant uses the sum-of-the-years' digits method for depreciation. Salvage value of the plant is 10% of FCI. Selling and distribution costs are $100 per ton of product. General overheads are 10% of sales revenue. Use tax rate of 25%. Recall that federal corporate tax was reduced from 34% to 21%. The added burden is due to state taxes. Assume 1 year of construction