Question 5: Capital Budget Analysis Decision DeVault Services recently hired you as a consultant to help with its capital budgeting process. Below is this analysis: (Dollar in $000) WACC 10.00% Years: 0 1 2 3 $(65,000) Investment Sales Operating Costs Depreciation EBT $ 65,500 $ 65,500 $ 65,500 $ 30,000 $30,000 $30,000 $ 21,666 $ 21,667 $ 21,667 $ 13,834 $ 13,833 $ 13,833 Tax (25%) Net Income $ 3,459 $ 10,376 $ 3,458 $ 10,375 $ 3,458 $ 10,375 $ 21,666 $ (3,275) Depreciation Working Capital Salvage (net tax) Net Project Cash Flow $ 21,667 $ 21,667 $ 3,275 $ 375 $32,042 $ 35,692 $(68,275) $ 32,042 Return: DCF NPV $ 82,425 $ 14,150 IRR 21.22% How would you define the risk analysis in this project