Question $6$

The Juniper Network Company is considering a new $5-$year expansion project that requires an initial fixed investment of $$2\mathrm{.}5$ million. The fixed asset will be depreciated straight line to zero over its five year tax life, afterwhich time it will be worthless. The applicable tax rate is $22\%.$

Estinated annual sales for the project are $$2\mathrm{.}2$ million with annual costs of $$1\mathrm{.}15mm.$ The project will also require an initial investment in NWC of $$140,000.$

Which of the following approaches can be used to analyze the project?