. Freedom 5:03 PM 96% Comprehensive Prob... a As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The equipment would cost $55.000, plus $10,000 for installation. Annual sales would be 4,000 units at a price of $50 per cartridge, and the project's life would be 3 years. Current assets would increase by $5.000 and payables by $3,000. At the end of 3 years, the equipment could be sold for $10,000. Depreciation would be based on the MACRS 3-year class. Variable costs would be 70% of sales revenues, flwed costs excluding depreciation would be $30,000 per year, the marginal tax rate is 40%; and the corporate WACC IS 11%. What is thered investment that is the Year Brit cash flow Copy Select All Look Up Share... unit sales turned out to be 20% below.cast, but other inputs were as forecasted? Would this change the decision? Explain The CFO asks you to do a scenario analysis using these inputs Probability Unit Sales Variable Cost Best Case 25 4800 Base Case SON 20% Worst Case 25 3.200 75 Other variables are unchanged. What are the expected NPV, its standard deviation, and the coefficient of variation? The firm's project CVs generely range from 1.0 to 1S. A 3% risk premium is added to the WACC if the initial CV exces, and the WACC is reduced by OS if the CV is 0.75 or less. Then a revised NPV is calculated. What WACC should be used for this project when project risk has been properly considered? What are the revised values for the NPV. standard deviation, and coefficient of variation? Would you recommend that the project be accepted? Why or why not? . Freedom 5:03 PM 96% Comprehensive Prob... a As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The equipment would cost $55.000, plus $10,000 for installation. Annual sales would be 4,000 units at a price of $50 per cartridge, and the project's life would be 3 years. Current assets would increase by $5.000 and payables by $3,000. At the end of 3 years, the equipment could be sold for $10,000. Depreciation would be based on the MACRS 3-year class. Variable costs would be 70% of sales revenues, flwed costs excluding depreciation would be $30,000 per year, the marginal tax rate is 40%; and the corporate WACC IS 11%. What is thered investment that is the Year Brit cash flow Copy Select All Look Up Share... unit sales turned out to be 20% below.cast, but other inputs were as forecasted? Would this change the decision? Explain The CFO asks you to do a scenario analysis using these inputs Probability Unit Sales Variable Cost Best Case 25 4800 Base Case SON 20% Worst Case 25 3.200 75 Other variables are unchanged. What are the expected NPV, its standard deviation, and the coefficient of variation? The firm's project CVs generely range from 1.0 to 1S. A 3% risk premium is added to the WACC if the initial CV exces, and the WACC is reduced by OS if the CV is 0.75 or less. Then a revised NPV is calculated. What WACC should be used for this project when project risk has been properly considered? What are the revised values for the NPV. standard deviation, and coefficient of variation? Would you recommend that the project be accepted? Why or why not