Please help me out.

'\" Tannen Industries Is considering an expansion. purchase, The necessary equipment would be purchased for $18 million and will be fully depreciated at the time of and the expansion would require an additionai $2 million Investment In net cheating working capital. The tax rate is 25%. a. What is the Initial Investment outlay after bonus depreciation ls considered? Write out your answer completely. For example, 13 million should be entered as 13,000,000. Round your answer to the nearest dollar. Enter your answer as a positive value. s O I O O O O b. The company spent and expensed $15,000 on research related to the project last year. would this change your answer? Explain. O I. No, last year's expenditure Is considered a sunk cost and does not represent an Incremental ash ow. Hence, it should not be Included in the analysis. 1' '10. . 11. Yes, the cost of research is an Incremental cash ow and should be included In the analysis. I I I I O O O 0 III. Yes, but only the tax effect of the research expenses should be included In the analysis. ted 11. IV. No, last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be Included In the Initial investment outlay. . 12. "m''x'a 13. | 14. 15. V. No, last year's expenditure Is considered an opportunity cost and does not represent an Incremental ash Iiow. Hence, it should not be included In the analysis. 1:. Suopose the company plans to use a building that it owns to house the project. The building could be sold for $4 million alter taxes and real estate 16. commissions. How would that fact affect your answer? 1. The potentiai sale of the building represents an opportunity cost or conducting the project In that buildlng. Therefore. the possible altertax sale price 17. must be charged against the project as a cost. II. The potential sale of the building represents an opportunity cost or conducting the project In that building. Therefore, the possible before-tax sale price 13. 0 must be charged against the project as a post. III. The potential sale of the building represents an externality and therefore shouid not be charged against the project. 19. (3' IV, The potential sale of the building represents a real option and therefore should be charged against me project V. The potential sale of the building represents a real option and therefore should not be merged against the project. 21.