Could someone please answer the 3 questions? I am not in a rush, but I would greatly appreciate it if they can all be answered before Sunday. Please and thank you very much.

Question 1:

Question 2:

Question 3:

Big Rock Brewery currently rents a bottling machine for $50,000 per year, including all maintenance expenses. The company is considering purchasing a machine instead and is comparing two alternate options: option a is to purchase the machine it is currently renting for $155,000, which will require $23,000 per year in ongoing maintenance expenses, or option b, which is to purchase a new, more advanced machine for $260,000, which will require $15,000 per year in ongoing maintenance expenses and will lower bottling costs by $11,000 per year. Also, $38,000 will be spent upfront in training the new operators of the machine. Suppose the appropriate discount rate is 9% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the rental of the machine. Assume also that the machines are subject to a CCA rate of 45% and there will be a negligible salvage value in 10 years' time (the end of each machine's life). The marginal corporate tax rate is 40%. Should Big Rock Brewery continue to rent, purchase its current machine, or purchase the advanced machine? To make this decision, calculate the NPV of the FCF associated with each alternative. (Note: the NPV will be negative, and represents the PV of the costs of the machine in each case.) ... The NPV (rent the machine) is $ (Round to the nearest dollar.) You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $1.1 million for this report, and I am not sure their analysis makes sense. Before we spend the $17 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars): 1 2 9 10 - Sales revenue Cost of goods sold = Gross profit - General, sales, and administrative expenses - Depreciation = Net operating income Income tax 31.000 18.600 12.400 1.360 1.700 9.340 3.269 31.000 18.600 12.400 1.360 1.700 9.340 3.269 6.071 31.000 18.600 12.400 1.360 1.700 9.340 3.269 31.000 18.600 12.400 1.360 1.700 9.340 3.269 6.071 = Net income 6.071 6.071 All of the estimates in the report seem correct. You note that the consultants used straight-line depreciation for the new equipment that will be purchased today (year 0), which is what the accounting department recommended for financial reporting purposes. CRA allows a CCA rate of 30% on the equipment for tax purposes. The report concludes that because the project will increase earnings by $6.071 million per year for 10 years, the project is worth $60.71 million. You think back to your glory days in finance class and realize there is more work to be done! First you note that the consultants have not factored in the fact that the project will require $15 million in working capital up front (year o), which will be fully recovered in year 10. Next you see they have attributed $1.36 million of selling, general and administrative expenses to the project, but you know that $0.68 million of this amount is overhead that will be incurred even if the project is not accepted. Finally, you know that accounting earnings are not the right thing to focus on! a. Given the available information, what are the free cash flows in years 0 through 10 that should be used to evaluate the proposed project? a. Given the available information, what are the free cash flows in years 0 through 10 that should be used to evaluate the proposed project? The free cash flow for year 0 is $ million. (Round to three decimal places, and enter a decrease as a negative number.) You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $1.2 million for this report, and I am not sure their analysis makes sense. Before we spend the $27 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars): 1 9 10 31.000 18.600 - Sales revenue - Cost of goods sold = Gross profit - General, sales, and administrative expenses - Depreciation = Net operating income - Income tax 2 31.000 18.600 12.400 2.160 2.700 7.5400 2.639 31.000 18.600 12.400 2.160 2.700 7.5400 2.639 4.901 - 12.400 2.160 2.700 7.5400 2.639 31.000 18.600 12.400 2.160 2.700 7.5400 2.639 4.901 = Net income 4.901 4.901 All of the estimates in the report seem correct. You note that the consultants used straight-line depreciation for the new equipment that will be purchased today (year o), which is what the accounting department recommended for financial reporting purposes. CRA allows a CCA rate of 20% on the equipment for tax purposes. The report concludes that because the project will increase earnings by $4.901 million per year for ten years, the project is worth $49.01 million. You think back to your glory days in finance class and realize there is more work to be done! First you note that the consultants have not factored in the fact that the project will require $10 million in working capital up front (year 0), which will be fully recovered in year 10. Next you see they have attributed $2.16 million of selling, general and administrative expenses to the project, but you know that $1.08 million of this amount is overhead that will be incurred even if the project is not accepted. Finally, you know that accounting earnings are not the right thing to focus on! b. If the cost of capital for this project is 10%, what is your estimate of the value of the new project? b. If the cost of capital for this project is 10%, what is your estimate of the value of the new project? Value of project = $ = million (Round to three decimal places.)