Preblem $W4(17$ marka$)$ Thocy did a markeling stody that cust $$15,000$ and have come up with some each flow projections based on the information received. In onder to shart prodoction they will have to purchase new mechinery that will cost $$150,000$ with a $6$ year life. Aher $6$ years the profected Sntvage vehte will be $530,000.$ The projected revernoes will be $575,000$ per year for the neat $6$ years. Costs of $515,000$ per year me projected for the $6$ yeark. In order to get things set up jroperly Austis Powers will have to invent $520,000$ in net working capital that will revert back to the original level after the $6$ year life. The company tax rate is $3096.$ The capital cost allowance is $3006$ and the required retum is $\frac{129}{?}.$ The company has many mnehines in whe CCA elass, lise the WIVY method so determaine if Austin Powers should fo ahead with the Groosey product.

$($Some of you may nocd: PV of tax shield on CCA$=\frac{[Cd{T}_i]}{dk}x\frac{[14\mathrm{.}5k]}{1k}-\frac{Sd{T}_e}{dk}x\frac{1}{(1k{)}^n})$

Section II $(5$ questions $=70$ marka$)$ Asrwer all the quentions in the spoce provided. Show all yow mork answers whithost the necessary calcularions will recelve no eradif

Problems $61(20$ marka$)$ You are considering two mantaally exelasive projocts that differ greatly on the required investment and projected cash flows. The initial investment reyufinct for PFOVECT I is $5100,000$ and for PROTECT II it is $535,000.$ Estimated aftertax cash flows are shown below.

$\backslash$table$[[$Year$,$Projectl,ProjectII$],[1,$$$5,000,$$$15,000$