1. The firm is looking to expand its operations by 10% of the firm's net property, plant, and equipment. (Calculate this amount by taking 10% of the property, plant, and equipment figure that appears on the firm's balance sheet.)

$10,550,000*10% = $1,055,000

2.The estimated life of this new property, plant, and equipment will be 12 years. The salvage value of the equipment will be 5% of the property, plant and equipment's cost.

PPE cost = $1,055,000

Years = 12

Salvage = 5%

Salvage vale = 5% * $1,055,000 = $52,750

Depreciation Expense = ($1,055,000 - $52,750) / 12 = $83,521 per year (using straight line)

3.The annual EBIT for this new project will be 18% of the project's cost.

EBIT = $1,055,000 * 18% = $189,900

4. The company will use the straight-line method to depreciate this equipment. Also assume that there will be no increases in net working capital each year. Use 25% as the tax rate in this project.(Tax rate = 25%)