Question: please answer all 2.) Needle and Thread Inc. is considering expanding one of its production facilities to build a new line of sewing kits. The

please answer all
please answer all 2.) Needle and Thread Inc. is considering expanding one

2.) Needle and Thread Inc. is considering expanding one of its production facilities to build a new line of sewing kits. The project would require a $9,000,000 capital investment and will be equally depreciated (straight-line) over its 3 year life. They believe they can salvage $1,200,000 for the equipment at the end of the project. Incremental sales are expected to be $10,000,000 annually for the 3 year period with cash operating expenses of 42% of sales. The company would also have to commit initial working capital to the project of $1,000,000. The company is subject to a marginal tax rate of 36% and investors require a 10% return on projects with a similar risk. Determine the project's NPV. Should the company pursue this investment opportunity? (10 points)

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