- Question 25 1 point Number Help Yellow Sand Health is evaluating the vending machine project, a 2-year project that would involve buying equipment for 56,000 dollars that would be depreciated to zero over 2 years using straight-line depreciation. Cash flows from capital spending would be $0 in year 1 and 20,000 dollars in year 2. Relevant annual revenues are expected to be 112,000 dollars in year 1 and 112,000 dollars in year 2. Relevant expected annual variable costs from the project are expected to be 13,000 dollars in year 1 and 13,000 dollars in year 2. Finally, the firm has no fixed costs in year 1 and one fixed cost in year 2 of the project. Yesterday, Yellow Sand Health signed a deal with Blue Eagle Consulting to develop an advertising campaign. The terms of the deal require Yellow Sand Health to pay Blue Eagle Consulting either 57,000 dollars in 2 years from today if the vending machine project is pursued or 29,000 dollars in 2 years from today if the vending machine project is not pursued. The tax rate is 30 percent and the cost of capital for the vending machine project is 9.65 percent. What is the net present value of the vending machine project? Number - Question 26 Red Royal Recycling is considering a project that would last for 2 years and have a cost of capital of 7.35 percent. The relevant level of net working capital for the project is expected to be 15,000 dollars immediately (at year 0); 20,000 dollars in 1 year, and 0 dollars in 2 years. Relevant expected revenue, costs, depreciation, and cash flows from capital spending in years 0, 1, and 2 are presented in the following table (in dollars). The tax rate is 50 percent. What is the net present value of this project? 1 point Number Help Year o Year 1 Year 2 L $0 168,000 168,000 Revenue Costs Depreciation $0 70,000 70,000 so $0 43,000 43,000 Cash flows from capital spending -91,000 13,000 Number - Question 27 Green Forest Recycling is considering a project that would last for 2 years. The project would involve an initial investment of 71,000 dollars for new equipment that would be sold for an expected price of 58,000 dollars at the end of the project in 2 years. The equipment would be depreciated to 23,000 dollars over 4 years using straight-line depreciation. In years 1 and 2, relevant annual revenue for the project is expected to be 78,000 dollars per year and relevant annual costs for the project are expected to be 22,000 dollars per year. The tax rate is 50 percent and the cost of capital for the project is 6.69 percent. What is the net present value of the project? 1 point Number Help Number