Question 4. ('l'otal 15 marks} Palantir Technologies Inc. is considering a project to produce a new machine to replace the current machine. The initial investment required for this new equipment will cost $2,000,000 in non-current assets today, and will be depreciated on a straight-line basis over a 4-year project period. Palantir expects that the equipment can be sold for about 20% of its acquisition cost when the project is nished. Palantir has spent about $150,000 for a marketing study and about $450,000 on research and development for the new project. As a result of the new equipment, current assets will increase by $300,000 and the current liabilities will increase by $200,000. The net working capital will be recovered at the end of the project. The new machine is expected to generate the sales revenue of $3.5 million with variable cost of $800,000. At the same time, Palantir expects that they will have reduced sales revenue of current machine by $900,000 while saving the variable cost of $150,000. Some other expenses including the xed cost is $00,000. Palantir currently has $5,000,000 of debt on the 3.2% of interest rate per annum, and the company tax rate is 35%. Required: a. Please create pro fon'na nancial statements including the income statement and projected total cash ow. (8 marks} b. Using the information obtained in (a), please calculate the NPV of the project when the required rate of return is 9%. (3 marks} c. Based on the NPV rule, will you accept this project? Also write down the reason for your decision. (1 mark} d. Using the information obtained in {a}, please calculate the Pl (protability index) when the required rate of return is 12%. (2 marks} e. Based on the PI rule, will you accept this project? Also write down the reason for your decision. (1 mark}