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will be very grateful to do all of the parts- will ensure 10 thumbs up. Demiralp, Inc., is planning to set up a new manufacturing

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will be very grateful to do all of the parts- will ensure 10 thumbs up.
Demiralp, Inc., is planning to set up a new manufacturing plant in New York to produce auto tracking camera. The company bought some land three years ago for $1.7 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would sell for $2.4 million on an aftertax basis. In four years, the land could be sold for $2.9 million after taxes. The company hired a marketing firm to analyze the market at a cost of $120.000. Here is the summary of marketing report: We believe that the company will be able to sell 8200, 9700, 6000, and 5500 units each year for the next four years, respectively. We believe that $350 can be charged for each unit. We believe at the end of the four-year period, sales should be discountinued. The company believes that fixed costs for the project will be $450.000 per year. Variable costs are $287,000, 5339.500, 5210,000, and $192.500 each year for the next four years respectively. The equipment necessary for production will cost $3.5 million and will be depreciated according to a three-year MACRS schedule. At the end of the project, the equipment can be scrapped or $500,000. Net working capital of $350.000 will be required immediately. The company has a 21 percent tax rate, and the required return on the project is 6 percent. Find the Year 3 depreciation expense. What is the after-tax cash flow from sale of the equipment? What is the capital spending cash flow of Year 0 and Year 4? Year 0: $6,250,000 outflow Year 4: $3,645,000 inflow Year 0: $3,500,000 outflow Year 4: $500,000 inflow Year 0: $3,500,000 outflow Year 4: $395,000 inflow Year 0: $5,900,000 outflow Year 4: $3,295,000 inflow Year 0: $2,400,000 outflow Year 4: $2,900,000 inflow What is the Operation Cash Flow (OCF) of Year 2? what is the NPV of the project? Should accept or reject the project? O NPV is $8,722,883.36 and should except the project. O NPV is $2,472,883.36 and should accept the project. NPV is $5,835,701.96 and should accept the project. O NPV is - $6,250,000 and should reject the project. NPV is $10,274,190 and should accept the project

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