Yeatman Co. is considering an investment that will have the following sales, variable costs, and faxed operating costs Year 1 Year 2 Year 3 Year 4 Unit sales 5,200 5,700 5,820 5,500 $42.57 Sales price $43.55 $44.76 $46.79 Variable cost per unit $22.83 $22.97 $23.45 $23.87 Fixed operating costs $66,750 $68,950 $69,690 $68,900 This project will require an investment of $20,000 in new equipment. Under the new tax law, the equipment is eligible for 100% bonus deprecation at t=0, so it will be fully depreciated at the time of purchase. The equipment will have no salvage value at the end of the project's four-year fe Yeatman pays a constant tax rate of 25%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's not present value (NPV) would be under the new tax law. Determine what the project's net present value (NPV) would be under the new tax law. O $111,189 O $87,017 @ $77,349 O $96,686 Po detall Allight-Cash Flow Estimation and Risk Analysis U$90,000 Now determine what the project's NPV would be when using straight-line depreciation Using the depreciation method will result in the highest NPV for the project. No other firm would take on this project Yeatman turns down, How much should Yeatman reduce the NPV of this project if it decovered that the project would reduce one of as division's net after-tax cash flows by $500 for each year of the four year project? O $1,551 O $931 O $1,163 Yeatman spent $1,750 on a marketing study to estimate the number of unes that it can sell each year What should Yeatmen do to take the information into account? O The company does not need to do anything with the cost of the marketing study because the marketing study is a su cast O Increase the amount of the initial investment by $1,750. O Increase the NPV of the project $1,750. Grade It Now Save & Continue Q Search this ca 0