Problem #6: Menards is thinking of purchasing new safety equipment for its employees, and the key data are shown below. The equipment for the project would be depreciated by straight-line depreciation over the project's 3-year life, after which it would be worth $41,000 (salvage value). It requires an increase in working capital (inventory) of $5,000, and revenues and other operating costs would increase by 3% over the project's 3-year life, starting in Year 2. a. What is the project's NPV? b. What is the project's IRR? If IRR and/or MIRR are not solvable, do not be concerned. c. Would you accept this project? Explain. WACC Net equipment cost Modification cost Increase in working capital (inventory) Salvage Value Depreciation method Sales revenues, in Year 1 Operating costs (excl. deprec.), in Year 1 Increase in revenues & costs, after Year 1 Tax rate 9.5% $58,000 $4,320 $5,000 $41,000 Straight line $123,000 $25,000 3% 35%