Tear Tears Tear 4 Unit sales 4,200 4,100 4,300 4,400 Sales price $29.82 $30.00 $30.31 $33.19 Variable cost per unit $12.15 $13.45 $14.02 $14.55 Fixed operating costs except depreciation $41,000 $41,670 $41,890 $40,100 Accelerated depreciation rate 33% 45% 15% 7% This project will require an investment of $10,000 in new Determine what the project's net present value (NPV) equipment. The equipment will have no salvage value at would be when using accelerated depreciation. the end of the project's four-year life. Yeatman pays a O $52,898 constant tax rate of 40%, and it has a weighted average O $47,608 cost of capital (WACC) of 11%. Determine what the O $63,478 project's net present value (NPV) would be when using O $42,318 accelerated depreciation. Now determine what the project's NPV would be when using straight-line depreciation Using the depreciation method will result in the highest NPV for the project. No other firm would take on this project if Yeatman turns it down. How much should Yeatman reduce the NPV of this project if it discovered that this project would reduce one of its division net after-tax cash flows by $400 for each year of the four-year project? O $1,055 O $1,365 $931 O $1,241 The project will require an initial investment of $10,000, but the project will also be using a company-owned truck that is not currently being used. This truck could be sold for $4,000, after taxes, if the project is rejected. What should Yeatman do to take this information into account? O Increase the amount of the initial investment by $4,000