Scenario 1) Your company, Astro-Physicians (AP), has. the.opportunity to implement a new system in the manufacturing plant that will take the place of current equipment and remain in use untila more advanced system is available in four years. The equipment will improve appearance - and reliability of current products. Marketing forecasts a $7.00 per unit price increase and annual sales are 118,500 units. The new equipment is also more efficient and will reduce unit costs by S2.00. The price of the equipment is $750,000.00. Delivery and installation will cost S50,000.00. Additional supplies are necessary and the change in Net Working Capital is expected to be $12,000.00. The expected annual cost of maintaining the additional floor space is S5,000.00. AP will use straight line deprecition over 5 years with $0 terminal value for this equipment, but expects to sell it for S100,000 at the end of its use for this project. 2) AP's cost of equity is 15% and the cost of debt is 8%. AP's capital distribution is 65% equity and 35% debt. 3) AP's tax rate is 25% 4) Use Excel or the attached table to 1. Prepare pro forma income statements 2. Prepare pro forma free cash flows 3. Calculate AP's WACC for cost of capital 4. Calculate the project's NPV 5. Calculate the project's IRR 6. Insert a text box in your spreadsheet, state whether you accept or reject this project, and briefly explain your rationale Income Statement rease in Sales Change in Cost of Goods (Variable Costs Income from sale in year 5 Change in Fixed Costs Change in Depreciation EBIT-Gross profit - fixed costs - depreciation Tax Expense-EBIT*tax rate Net Income Cash Flow from Assets Operating cash flow-EBIT+ depreciation-tax expense Change in NWC (see Project Description) Capital spending Total project cash flow