PQR Co has asked you to evaluate the following proposal. PQR Co is contemplating the purchase...

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PQR Co has asked you to evaluate the following proposal. PQR Co is contemplating the purchase of a new machine for $750,000 to produce a new PQR drink. This machine would be used for years, after which the machine will be worthless. Launch of the new PQR drink will also require a $65,000 increase in working capital - an increase which will be recovered at the end of the 4 years (when the drink is pulled from the market and the machine reaches the end of its useful life). Over this 4-year product life, PQR Co estimates incremental annual sales of $365,000 and increased annual cash-costs of $12,500. Based on PQR Co's discount rate of 15.0% and a marginal tax rate of 21.0% please answer the following for PQR Co's management: a) [2 pts] What is the total initial investment for this project? b) [2 pts] What is the project's incremental after-tax cash flow in year 1? c) [2 pts] What is the project's incremental after-tax cash flow in year 4? d) [1 pt] If the calculated IRR for this project is 22.4%, should PQR Co accept this project? Why - please explain your answer. PQR Co has asked you to evaluate the following proposal. PQR Co is contemplating the purchase of a new machine for $750,000 to produce a new PQR drink. This machine would be used for years, after which the machine will be worthless. Launch of the new PQR drink will also require a $65,000 increase in working capital - an increase which will be recovered at the end of the 4 years (when the drink is pulled from the market and the machine reaches the end of its useful life). Over this 4-year product life, PQR Co estimates incremental annual sales of $365,000 and increased annual cash-costs of $12,500. Based on PQR Co's discount rate of 15.0% and a marginal tax rate of 21.0% please answer the following for PQR Co's management: a) [2 pts] What is the total initial investment for this project? b) [2 pts] What is the project's incremental after-tax cash flow in year 1? c) [2 pts] What is the project's incremental after-tax cash flow in year 4? d) [1 pt] If the calculated IRR for this project is 22.4%, should PQR Co accept this project? Why - please explain your answer.