t. New Equipment Purchase: The equipment is purchased in 3 phases. Phase 1: Purchase cost =$40 million. Purchased at the project beginning, at time zero. It is depreciated using MACRS method for 7 years. Phase 2: Purchase cost =$14 million. Purchased at the end of year 1 . Depreciation begins in 2nd year. It is depreciated using MACRS method for 5 years. Phase 3: Purchase cost =$28 million. Purchased at the end of 2nd year. Depreciation begins in 3rd year. It is depreciated using straight line method for 7 years. g. Net working capital requirements: The net working capital for this project is expected to be 17% of sales and is expected to occur at the beginning of the year. h. Tax rates: The incremental marginal corporate income tax rates: Fed =28%, State ( Ohio) =7.52%, Berea =2% Capital Gains (Loss) Tax Rate =20% i. Minimum acceptable rate of return (MAAR): Lion Corporation's before tax MARR is 21% j. Project life and terminal Values The expected life of the project is 8 years. At the end of that life, the equipment is expected to be sold for $14 million. Your group has been hired by Vince Carter. You will write a one-page summary report answering the following questions. A summary paragraph should contain your recommendation and include a succinct rationale supporting your recommendation. You must attach the spread sheets - so your presentation should have three attachments and the one-page summary. 1. What is the NPV? 2. What is the IRR? 3. What is the Discounted Payback? 4. What is Profitability Index