**Options for second drop down are (1. accelerated) or (2. straight-line).

h 11: Assignment - Cash Flow Estimation and Risk Analysis Fox Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs: Year 1 Year 2 Year 3 Year 4 Unit sales 4,200 4,100 4,300 4,400 Sales price $29.82 $30.00 $30.31 $33.19 Variable cost per unit $12.15 $13.45 $14.02 $14.55 $41,000 $41,670 $41,890 $40,100 Fixed operating costs except depreciation Accelerated depreciation rate 33% 45% 15% 7% This project will require an investment of $25,000 in new equipment. The equipment will have no salvage value at the end of the project's four-year life. Fox pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project's net present value (NPV) would be when using accelerated depreciation. accelerated depreciation. (Note: Round your intermediate calculations to Determine what the project's net present value (NPV) would be when the nearest whole number.) O $51,370 O $49,229 O $34,246 0 $42,808 Now determine what the project's NPV would be when using straight-line depreciation. 52,976 Using the depreciation method will result in the highest NPV for the $42,381 No other firm would take on this project if Fox turns it down. How much should Fox redu of this project if it discovered that this project 55,095 would reduce one of its division's net after-tax cash flows by $300 for each year of the f foject? 40,262 O $1,024 O $791 O $931 O $559