Use the following information to answer questions 34-38. ASC, Inc. is considering the production of a new line of soft drinks at its Springfield, IL plant. The CFO of ASC, Inc. is provided with the following information on the new project: > The expansion will require the immediate purchase of new machinery for $29,000,000. The firm has spent $1,000,000 to train workers to use the new machinery. The incremental sales from this project are expected to be $19,500,000 per year. The incremental operating expenses (excluding depreciation) are expected to equal $11,300,000 per year. > The company uses straight-line depreciation. The project has an economic life of 10 years. The machinery has a salvage value of $1,000,000 and will be sold for that amount at the conclusion of the project. - The company will increase net working capital by $1,200,000 at the beginning of the project, and it will be liquidated at the end of the project. > ASC Inc.'s marginal tax rate is 40%. > ASC Inc.'s weighted average cost of capital (WACC) is 10%. 35. Based on this information, the project's operating net cash flow in year 10 is $ a. 6,280,000 b. 6,680,000 c. 8,240,000 d. 8,160,000 e. 7,280,000 36. The IRR of this project is %. a. 19.40 b. 15.56 c. 14.88 d. 17.02 e. 16.18