Hello, I need help with the bottom two questions 5 and 6.

Capital Budgeting Piactice Suppose we want to prepare a set of pro forma financial statements for a project involving a new financial calculator for Hewey-Packer. In order to do so, we must have some background information. We assume: a. Sales of 1,000,000 units per vear at $45 per unit b. Variable cost per unit is $26.00. Fixed production costs are $12,000,000 per year. The project has no salvage value and a 7 year life. c. The project has an initial fixed asset acquisition expense of $21,000,000. We will depreciate straight-line d. Net working capital outlay is $8M in period zero with 60% recovered in project's terminal vear. e. The firm's required rate of return is 8%. The firm's tax rate is 34% 1. Complete following Projected Income statement If thereis salvage value put it @ the end of theyerial 4. What is the NPV and IRR with 10\% required rate af return? Are you going to accept this project bV NPV method or IAR with 10% required rate of return? NPV=28,000+1.15,640+(1,1)25,640+(1,1)710,440 IRR =29,000+1+56cmNPV=92104 CF0=29000 project CO1=5640FO1=6 IRR >10% CO2=10440 IRRCPT 10,89 IRRCPT 10,89 5. Try to express the NPV that you have calculated in question 4 in annual basis. Following equivalent annual costs (EAC) method allows expressing the NPV in annual basis. This method is useful when we compare project with different lives. - We want to choose the most cost-effective project but the process is complicated if the assets have different lives. Commonly, we use equivalent annual costs (EAC) or equivalent annual annuity (EAA) to evaluate alternatives. This is simply the present value of the project's costs calculated on an annual basis. - It is a three step procedure to find the EAC or the EAA: 1. Find each project's net present value over its initial life. NPV=9 2. Find the equivalent annual cost factor/equivalent annual annuity factor. 3. Discount the net present value by equivalent annual cost or annuity factor. Solution: 1. Use the NPV that you have calculated in question 4. (you can just write down NPV) 2. You can calculate EAC/EAA factor in following way. 1PMT 10%1/Y 7N CPT PV = ???