The Nakatomi Corporation is preparing to expand their manufacturing operations.....

SOLVE ASAP PLEASE!

Question 1[4 points). (This problem should be completed completely by hand. Excel may not be used). The Nakatomi Corporation is preparing to expand their manufacturing operations. This expansion will require the purchase of additional land, the manufacturing facility that sits on this site, and the purchase of new equipment to use in this facility. The land and building will be purchased on August 5th of this year for a cost of $350,000 and $1,500,000 respectively. The equipment will be purchased in the same month at a cost of $520,000. An investment in working capital in the amount of $250,000 is also required at the start of the project, but this amount will be fully recovered at the end of the project. The building will be depreciated according to a 39 year MACRS schedule. This new facility is expected to generate annual revenues of $775,000 for the ten years that this plant is expected to be in operation. Nakatomi plans to sell the land and building on March 28th of the tenth year for $500,000 and $800,000 respectively. The equipment can be depreciated according to a seven year MACRS schedule AND has a seven year useful life. Therefore, a second set of equipment will be purchased in the 7th year, for the same cost, which will be used to fulfill the remaining years of the project. The first set of equipment can be scrapped for $50,000 in year 7 and the second set can be sold for $250,000 at the end of the 10th year of the project. The annual costs of direct material, direct labor, and manufacturing overhead total $465,000 for each year of the project. Operating and maintenance costs are anticipated to be $22,500 per year for each year of the project. Nakatomi is subject to 21% federal tax and 6.968% state tax rate. Their MARR rate is 15% (a) [3 points) Find the after projected after tax net cash flows for each year of this investment project. (b) (1 point] Should Nakatomi invest in this expansion project? Support your answer with a calculation of the net present worth of the investment project. Question 1[4 points). (This problem should be completed completely by hand. Excel may not be used). The Nakatomi Corporation is preparing to expand their manufacturing operations. This expansion will require the purchase of additional land, the manufacturing facility that sits on this site, and the purchase of new equipment to use in this facility. The land and building will be purchased on August 5th of this year for a cost of $350,000 and $1,500,000 respectively. The equipment will be purchased in the same month at a cost of $520,000. An investment in working capital in the amount of $250,000 is also required at the start of the project, but this amount will be fully recovered at the end of the project. The building will be depreciated according to a 39 year MACRS schedule. This new facility is expected to generate annual revenues of $775,000 for the ten years that this plant is expected to be in operation. Nakatomi plans to sell the land and building on March 28th of the tenth year for $500,000 and $800,000 respectively. The equipment can be depreciated according to a seven year MACRS schedule AND has a seven year useful life. Therefore, a second set of equipment will be purchased in the 7th year, for the same cost, which will be used to fulfill the remaining years of the project. The first set of equipment can be scrapped for $50,000 in year 7 and the second set can be sold for $250,000 at the end of the 10th year of the project. The annual costs of direct material, direct labor, and manufacturing overhead total $465,000 for each year of the project. Operating and maintenance costs are anticipated to be $22,500 per year for each year of the project. Nakatomi is subject to 21% federal tax and 6.968% state tax rate. Their MARR rate is 15% (a) [3 points) Find the after projected after tax net cash flows for each year of this investment project. (b) (1 point] Should Nakatomi invest in this expansion project? Support your answer with a calculation of the net present worth of the investment project