13. Project Evaluation. Happy Jacks Hot Dogs is looking at a new sausage system with an installed cost of $655 000, This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped for $85000. The sausage system will save the firm $183 000 per year in pre-tax operating costs, and the system requires an initial investment in net working capital of $35000. If the tax rate is 30% and the discount rate is 8%, what is the NPV of this project?

14. Project Evaluation. Your firm is contemplating the purchase of a new $395 000 computer- based order entry system. The system will be depreciated straight-line to zero over its five- year life, It will be worth $30 000 at the end of that time. You will save $125 000 before taxes per vear in order-processing costs, and you will be able to reduce working capital by $35 000 at the beginning of the project. Working capital will revert to normal at the end of the project. If the tax rate is 30%, what is the IRR for this project?

15. Project Evaluation. In the previous problem (question 14), suppose your required return on the project is 10% and your pre-tax cost savings are $135 000 per year. Will you accept the project? What if the pre-tax cost savings are only $95000 per year?

16. Scenario Analysis. Wee Waa Motors Ltd has the following estimates for its new gear assembly project:

- price 1$995 per unit

- variable costs = $400 per unit

- fixed costs = $4.25 million

- quantity = 75000 units.

Suppose the company believes all of its estimates are accurate only to within +15%. What values should the company use for the four variables given here when it performs its best- case scenario analysis? What about the worst-case scenario?

17. Sensitivity Analysis. For the company in the previous problem (question 16), suppose management is most concerned about the impact of its price estimate on the project's profitability. How could you address this concern for Wee Waa Motors? Describe how you would calculate your answer. What values would you use for the other forecast variables?

18. Sensitivity Analysis and Break-even. We are evaluating a project that costs $1.68 million, and has a six-year life and no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 90 000 units per year. Price per unit is $37.95, variable cost per unit is $23.20 and fixed costs are $815 000 per year. The tax rate is 30%, and we require a return of 11% on this project. a. Calculate the base-case cash flow and NPV. What is the sensitivity of NPV to changes in the sales figure? Explain what your answer tells you about a 500-unit decrease in projected sales. b. What is the sensitivity of OF to changes in the variable cost figure? Explain what your answer tells you about a $1 decrease in estimated variable costs.

Please Help me to solve the problem 13 to 18, no excel if possible