Scenario: A new product manager presents to you, the Chief Financial Officer, a proposal to expand operations that includes the purchase of a new machine. The product manager is certain that the positive cash flows, which exceed the initial outlay by $20,000 by the end of year 4, will bring both praise and approval. You explain the company uses a 12% discount rate for cash ows and project related budgeting. You take the time to present the details of the Net Present Value (NPV) model used to assess product proposals. The data is below. Project Outows to Buy Machine Day 1 Cash Out -$70,000 12% discount rate applied. End Year 1 Cash Repayment $10,000 End Year 2 Cash Repayment $20,000 End Year 3 Cash Repayment $30,000 End Year 4 Cash Repayment $30,000 To educate the new manager, and as CFO, you take the time to evaluate the following: 1. Evaluate how the Time Value of Money concept results in a discounted cash ow in year 4 (an amount less than $30,000). Correctly sums the discounted stream of cash ows. 2. Assess the investment option using a 12% cost of capital discount rate by applying the NPV model. Include values in your assessment. Provide the NPV at a 12% cost of capital discount rate. Include values in your assessment. Correctly calculates the N PV at a 12% cost of capital discount rate and includes the values in the assessment. 3. Assess the investment option when a 7% cost of capital discount rate, versus a 12% cost of capital discount rate is applied. include values in your assessment. Provides the NPV at a 7% cost of capital discount rate. Correctly calculates the MVP at a 12% cost of capital discount rate and includes values in the assessment