Question 3 (25 points) Part A Your company is considering a new project with estimated annual depreciation of $630, fixed costs of $5,000, and total sales of $10,050. The variable cost per unit is estimated at $3.75. What is the accounting break-even level of production? (7 points) Part B Louie's Leisure Products is considering a project which will require the purchase of $1.4 million in new equipment. The equipment will be depreciated straight-line to a zero book value over the 7-year life of the project. Louie's expects to sell the equipment at the end of the project for 20% of its original cost. The project requires also a net working capital of 0.2 million. The net working capital will be recovered at the end of the project. Operating cash flow from this project is estimated at $1.2 million per year. The firm desires a minimal 10% rate of return on this project. The tax rate is 34%. i) ii) What is the value of the depreciation each year? (6 points) What is the amount of the after-tax salvage value of the equipment? What is the net present value of the project? (6 points) (6 points) iii)