GE Power is installing a new sensor system in its factory for $50,000 that will save $40,000 per year in costly leaks of raw materials. The savings will grow by 3% each year, concurrent with production growth over 10-year life of the sensor GE Power estimates a 13% cost of capital for the project and has a tax rate of 21% The company will depreciate the sensor using the straight-line method over its 10-year life and it will have no re-sale value at the end of 10 years. Use this information to calculate the following key pieces of information: Answer(s): The CFFA in year 1. (Exclude the initial investment, just focus on the savings in year 1) 41,050 The NPV of the entire project (including intial investment)? 9,369 Question: (Same setup from N7) GE Power is installing a new sensor system in its factory for $50,000 that will save $40,000 per year in costly leaks of raw materials. The savings will grow by 3% each year, concurrent with production growth over 10-year life of the sensor GE Power estimates a 13% cost of capital for the project and has a tax rate of 21% The company will depreciate the sensor using the straight-line method over its 10-year life and it will have no re-sale value at the end of 10 years. New Information This project also requires an initial investment to increase inventory of raw materials of $4000, which will stay in inventory for the life of the project, then be fully converted in to cash at the end of the project (no taxes, no depreciation). Use this information to calculate the following key pieces of information: Answer(s): The CFFA in year 0 (initial investment) 32,650 3 CFFA in year 1 4 33.598 5 The new NPV of the entire project (including initial investment) 5 143,771