You are a newly graduated management consultant Looking for an Opportunity and recently

Come up with a Job opportunity to work with Incas Company. The company is looking at

setting up a manufacturing plant overseas to produce a new line of Products. This will be a

five$-$year project. The company bought some land three years ago for $$8\mathrm{.}25$ million in

anticipation of using it as a toxic dump site for waste, chemicals, but it built a piping system to

safely discard the chemicals instead. If the land were sold today, the net proceeds would be

$$7\mathrm{.}95$ million after taxes. In five years, the land will be worth $$9\mathrm{.}75$ million after taxes. The

company wants to build its new manufacturing plant on this land; the plant will cost $$21\mathrm{.}50$

million to build. The following market data on Inca's securities are current: Debt: $72,6509\mathrm{.}35$

percent coupon bonds outstanding, $10$ years to maturity, selling for $92\mathrm{.}75$ percent of par; the

bonds have a $$1,000$ par value each and make semi$-$annual payments. Common stock:

$1460000$ shares outstanding, selling for $$82\mathrm{.}75$ per share; the beta is $1\mathrm{.}5.$ Preferred stock:

$88,500$ shares of $7\mathrm{.}3$ percent preferred stock outstanding, selling for $$95\mathrm{.}5$ per share.

Market $7\mathrm{.}75$ percent expected market risk premium; $5\mathrm{.}65$ percent risk$-$free rate. Incas tax

rate is $25$ percent. The project requires $$983,500$ in initial net working capital investment to

get operational. a$.$ Calculate the project's Time $0$ cash flow, taking into account all side

effects. Assume that any NWC raised does not require floatation costs. $($A negative answer

should be indicated by a minus sign. Do not round intermediate calculations and enter your

answer in dollars, not millions of dollars, e$.$g$.,1,234,567.)b.$ The new project is somewhat

riskier than a typical project for Incas, primarily because the plant is being located overseas.

Management has told you to use an adjustment factor of $+1$ percent to account for this

increased riskiness. Calculate the appropriate discount rate to use when evaluating Inca's

project. $($Do not round intermediate calculations and enter your answer as a percent rounded

to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$ c$.$ The manufacturing plant has an eight$-$year tax life, and

Incas uses straight$-$line depreciation. At the end of the project $($i$.$e$.,$ the end of Year $5),$ the

plant can be scrapped for $$1\mathrm{.}675$ million. What is the after$-$tax salvage value of this

manufacturing plant? $($Do not round intermediate calculations and enter your answer in

dollars, not millions of dollars, e$.$g$.,1,234,567.)$ d$.$ The company will incur $$3,685,000$ in

annual fixed costs. The plan is to manufacture $12,795$ Units per year and sell them at

$$10,550$ per machine; the variable production costs are $$9,475$ per Unit. What is the annual

operating cash flow, OCF, from this project? $($Do not round intermediate calculations and

enter your answer in dollars, not millions of dollars, e$.$g$.,1,234,567.)$ e$.$ Calculate the

project's net present value. $($Do not round intermediate calculations and enter your answer in

dollars, not millions of dollars, rounded to $2$ decimal places, e$.$g$.,1,234,567\mathrm{.}89)$ f$.$ Calculate

the project's internal rate of return. $($Do not round intermediate calculations and enter your

answer as a percent rounded to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$ Estimate the value of the company with its leverage Policy Using

APV approachYou're prepared to make monthly payments of $$350,$ beginning at the end of this

month, into an account that pays $7$ percent interest compounded monthly.

How many payments will you have made when your account balance reaches $

$24,564?$ Required in excel