Supposeyou have been hred os o financiol consutont to Defenge Electronicsi inc. (DEA. o lorge, publicly traded firm thot is the market shere les der in redor detection syrtems: (RDSs). The compony is looking ot setting up o monufocturing plant overseos to produce o tew line of RDS5. This will be of five-year project. The compsry bought some lond three years ogo for 57.2 rill on in stibipotion of using it t5 0 tovic dump site for yoste chemicals, but it built o piping syctem to tsfely discord the chemicols instesch. of the lond were sold todoy, the net procecds would be 5771 million aftertaxes. In five yecrs, the Isnd will be worth $8.01 milion ofter isxes. The company wonts to build its new monutacturing plant on this lond, the plont will cost $13. 4 million to buld. The following morket dois on DEls securities ore curtent. DebE: 922006.9 percert coupon borids outstanding. 23 years to moturity, selling for 93.9 percent of per, the bonds hove to $1.000 por volue esch and rioke isert onriusl poyments Common stock 1700,000 shores outstording, selling for $95:0 per there, the beto is Prefered stock 80,000 eheres of 6.25 percent preferned stock outstanding. 5 eling for. 59310 perstare. Morket 7:5 percent oxpected morket risk ptemium. 5.05 percent risk4red rote. DEl' wox rote is 21 percent. The project reduirs. 5880.000 in nit of net working copital investrent to get operotionel. a. Colculote the project' Time 0 cosh fiow, taking into occount of side eftect Assume) that ory NWC roised does not require flostetion coits. A A negattve answer shouid be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dolars, not mitions of dolars, e.9. 1,234,567) b. The new RDS pro, ect is sortewhot ritwer thor a tyoicel project for DE, prituriy becouse the piant is being locoted overseos. Monogement hos told you to use on ocjustment foctor of +2percent to occount for this increased fiakiness. colculote the oppropriofe discount rote to use when evolusting DEl's prciect. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 . decimal places, e.g. 3216) c. The mefufecturing plons has on eightyeer tax life, ond DEl uses wuo.ghtinte depreciotion. At the end of the project (ie, the end of Yest 5 ), the plonit con be scropped for $1.61 million. What is the otterts x solvoge volue of this rosnurbcturing pont? (Do not round intermediate calculations and enter your answer in dollars., mot milsons of dollars, e.g 1,234,567) d. The compony will incur $2,410,000 in onnus ficed costs. The plen is to menufecture 14,100 9DSs peryeer and sell them ot 511.500 per mochine, the vorioble production costs se S10700 per RDS. What is the annuc operating cosh fow. OCF. from this project? (Do not round tntermed late calculations arid enteryour answer ir dollars. not mailions of dollars, e.9, 1,234.567.) e. Celculate the project's net present value. (Do not round tritermediate calculations and enter your answer in dollars. not militons of dollars, rounded to 2 decimal places, e.9- 1,23 a,567.89) 1. Colculote the project's internsi rete of rewm, (Do riot round intermed ate calculations and enter your answer af a percent rounded to 2 dectimal places. e.g. 32.163
