Question 9 1 pts Use this information for questions 9 and 10: Your company is considering expanding to sell your product in Alabama. You estimate an increase in revenues of $750,000 each year for the next five years. The plant and equipment (new fixed assets) needed to manufacture additional goods costs $2,000,000 and will be depreciated on a straight-line basis to $500,000 over the five year project. In five years, you anticipate selling these assets for $1,000,000. This new plant and equipment would be built on land the company bought 3 years ago for $35,000. The company could sell this land today for $40,000 (if you do not accept the project), or the company could sell the land 5 years from now for $45,000 (when the project is over, if you accept the project). Additional manufacturing costs to produce additional products would total $225,000 each year. Your company expects to increase net working capital by $50,000 if the project is accepted, but net working capital will revert to the original level when the project is complete. The tax rate is 10%. What is the after-tax salvage value of the fixed assets (to be clear: the fixed asset but not the land)? $400,000 $450,000 $950,000 $500,000 1 pts Question 10 How does the value of the land enter the timeline? (Want more practice? Find the NPV and IRR of this project.) O the $40,000 value today is an opportunity cost that reduces incremental cash flow at time zero, and the $45,000 value in year 5 is added to the year 5 operating cash flow. O the $35,000 cost increases the total cost at time zero, the $40,000 value today is an opportunity cost that reduces incremental cash flow at time zero, and $45,000 value in year 5 is an opportunity cost that reduces cash flow at year 5. the $35,000 cost increases the total cost at time zero. the $35,000 past cost and the $40,000 value today are sunk costs that are ignored. The $45,000 value in year 5 is an opportunity cost that reduces the year 5 operating cash flow