Question: Please help answer this 3 part question. Thank you! Quantitative Problem: Sunshine Smoothies Company (SSC) manufactures and distributes smoothies. SSC is considering the development of

Please help answer this 3 part question. Thank you!

Please help answer this 3 part question. Thank you! Quantitative Problem: Sunshine

Quantitative Problem: Sunshine Smoothies Company (SSC) manufactures and distributes smoothies. SSC is considering the development of a new line of high-protein energy smoothies. SSC's CFO has collected the following information regarding the proposed project, which is expected to last 3 years: The project can be operated at the company's Charleston plant, which is currently vacant The project will require that the company spend $3.5 million today (t = 0) to purchase additional equipment. This equipment is eligible for 100% bonus depreciation, so the equipment is fully depreciated at the time of its purchase. The company plans to use the equipment for all 3 years of the project. At t = 3 (which is the project's last year of operation), the equipment is expected to be sold for $1,600,000 before taxes. The project will require an increase in net operating working capital of $730,000 at t 0. The cost of the working capital will be fully recovered at t 3 (which is the project's last year of operation) Expected high-protein energy smoothie sales are as follows: Sales Year 1 $2,000,000 7,550,000 2 3 3,400,000 The project's annual operating costs (excluding depreciation) are expected to be 60% of sales The company's tax rate is 25%. The company is extremely profitable; so if any losses are incurred from the high-protein energy smoothie project they can be used to partially offset taxes paid on the company's other projects. (That is, assume that if there are any tax credits related to this project they can be used in the year they occur.) The project has a WACC 10.0%. What is the project's expected NPV and IRR? Round your answers to 2 decimal places. Do not round your intermediate calculations. NPV $ IRR % Should the firm accept the project? -Select

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