Quantitative Problems Sunshine Smoothies Company (SSC) manufactures and distributes smoothies, SSC is considering the development of a new line of high protein energy smoothies. SSC 0 has collected the following information regarding the proposed project, which is expected to last 3 years: The project can be operated at the company's Charleston plant, which is currently vacant. The project will require that the company spend $4.9 million today (t = 0) to purchase additional equipment. For tax purposes the equipment will be deprecated on a straight-line basis over 5 years. Thus, the firm's a depreciation expense is $4,900,000/5 = $980,000. The company plans to use the equipment for all 3 years of the project. Att - 3 (which The project will require an increase in net operating working capital of 450,000 *t-o. The cost of the working capital will be fully recovered at t-3 (which is the project's last year of operation) Expected high protein energy smoothie sales are as follows: Yee Sales 1 $3,200,000 2 7.900,000 3 2.950,000 . The project's annual operating costs (excluding depreciation) are expected to be one of sales The company's tax rates 40% The company is extremely profitable; so if any losses are incurred from the high protein energy smoothie project they can be used to partially offset tave paid on the company's other projects. That is, assume that there are any tax credits related to this project they can be used in the year they occur.) The project has a WACC - 100% What is the project's expected NPV and IRR? Round your answers to 2 decimal places. De tot round your intermediate calculations. $ IRR Should the firm accept the project The film held at the project NPV SSC is considering another project: the introduction of weight loss smoothie. The project would require a $3 million investment outlay today (t 0). The after-tax cash flows would depend on whether the weight loss smoothie is well received by consumers. There is a 40% chance that demand will be good, in which case the project will produce after tax cash flows of $1.6 million at the end of each of the next years. There is a 60% chance that demand will be poor, in which case the after-tax cash flows wil de 10.52 million for years. The project is riskler than the firm's other projects, so it has a WACC of 135. The firm will know the project is successful after receiving the cash flows the first year, and after receiving the first year's cash flows will have the option to abandon the project. If the firm decides to abandon the project the company will not receive any cash flows aftert=1, but it will be able to sell the assets related to the project for $2.5 miliona terases att1. Assuming the company has an option to abandon the project, what is the expected NPV of the project today? Round your answer to 2 decimal places. Do not round your intermediate calculations. Use the values in millions of dollars to ascertain the answer millions of dollars Quantitative Problems Sunshine Smoothies Company (SSC) manufactures and distributes smoothies, SSC is considering the development of a new line of high protein energy smoothies. SSC 0 has collected the following information regarding the proposed project, which is expected to last 3 years: The project can be operated at the company's Charleston plant, which is currently vacant. The project will require that the company spend $4.9 million today (t = 0) to purchase additional equipment. For tax purposes the equipment will be deprecated on a straight-line basis over 5 years. Thus, the firm's a depreciation expense is $4,900,000/5 = $980,000. The company plans to use the equipment for all 3 years of the project. Att - 3 (which The project will require an increase in net operating working capital of 450,000 *t-o. The cost of the working capital will be fully recovered at t-3 (which is the project's last year of operation) Expected high protein energy smoothie sales are as follows: Yee Sales 1 $3,200,000 2 7.900,000 3 2.950,000 . The project's annual operating costs (excluding depreciation) are expected to be one of sales The company's tax rates 40% The company is extremely profitable; so if any losses are incurred from the high protein energy smoothie project they can be used to partially offset tave paid on the company's other projects. That is, assume that there are any tax credits related to this project they can be used in the year they occur.) The project has a WACC - 100% What is the project's expected NPV and IRR? Round your answers to 2 decimal places. De tot round your intermediate calculations. $ IRR Should the firm accept the project The film held at the project NPV SSC is considering another project: the introduction of weight loss smoothie. The project would require a $3 million investment outlay today (t 0). The after-tax cash flows would depend on whether the weight loss smoothie is well received by consumers. There is a 40% chance that demand will be good, in which case the project will produce after tax cash flows of $1.6 million at the end of each of the next years. There is a 60% chance that demand will be poor, in which case the after-tax cash flows wil de 10.52 million for years. The project is riskler than the firm's other projects, so it has a WACC of 135. The firm will know the project is successful after receiving the cash flows the first year, and after receiving the first year's cash flows will have the option to abandon the project. If the firm decides to abandon the project the company will not receive any cash flows aftert=1, but it will be able to sell the assets related to the project for $2.5 miliona terases att1. Assuming the company has an option to abandon the project, what is the expected NPV of the project today? Round your answer to 2 decimal places. Do not round your intermediate calculations. Use the values in millions of dollars to ascertain the answer millions of dollars