Chapter 12 Cash Flow Estimation and Risk Analy Suppose you now learn that R&D costs for the new product were and that t costs were incurred and expensed for tax $30 would this a our estimate of NPV purposes last year How and the other profitability measures? f the new project would reduce cash flows from Cory's other projects and if the project would be housed in an empty building that Cory owns and could sell, how w hose factors affect the project's NPV? are this project's cash flows likely to be positively or negatively correlated with re n Cory's other projects and with the economy, and should this matter in your anal xplain. nrelated to the new product, Cory is analyzing two mutually exclusive machines ill upgrade its manufacturing plant. These machines are considered average-risk ojects, so management will evaluate them at the firm's 10% WACC. Machine x e of 4 years, while Mac Y has a life of 2 years. The cost of each machine i s60 owever, Machine X provides after-tax cash flows of $25,000 per year for 4 years achine Y provides after-tax cash flows of $42,000 per year for 2 years. The man ring plant is very successful, so the machines will be repurchased at the end of chine's useful life. In other words, the machines are "repeatable" projects. Using the replacement chain method, what is the NPV of the better machine? Using the EAA method, what is the EAA of the better machine? readsheet assignment: at instructor's option Construct a spreadsheet that calcu nnu hack and MIRR