will be costs should and there will be no Industries is analyzing an average-risk project, and the following data have been developed. Unit sales constant, but the sales price should increase with inflation. Fixed costs will also be constant, but variable rise with inflation. The project should last for 3 years, it will be depreciated on a straight-line basis, salvage value. No change in net operating working capital would be required. This is just one of many projects for the firm, so any losses on this project can be used to offset gains on other firm projects. The marketing manager does not think it is necessary to adjust for inflation since both the sales price and the variable costs will rise at the same rate, but the CFO thinks an inflation adjustment is required. What is the difference in the expected NPV if the inflation adjustment is made versus if it is not made? Do not round the intermediate calculations and round the final answer to the nearest whole number. WACC 10.0% Net investment cost (depreciable basis) Units sold A verage price per unit, Year I Fixed op. cost excl. depr. (constant Variable op. cost/unit, Year 1 Annual depreciation rate Expected inflation Tax rate a. $8,414 b. $10,860 c.$9,784 d. $7,729 e. $8,708 $200,000 36,000 $25.00 $150,000 33.333% 4.0% 40.0%