) Questions/Decision - Do you recommend that Pappy proceed with the project or Terminate the project

(2.) Explain the decision in a memo to Pappy with enough detail so that he can Make a good decision.

Chapter 9 Question 22 Input area: : $ $ Marketing study Sales/year Fixed costs Variable costs % of sales) Equipment Product life Tax rate Required return 120.000 835.000 204,000 20% 865,000 $ 23% 13% Output area: yr 0 yr 1 yr 2 yr 3 yr 4 yr O $ $ $ $ Sales Variable costs Fixed costs Depreciation EBT Tax (23%) Net income sales Vo FC Dep total costs $ $ $ $ $ $ NIBT tax $ $ $ $ $ Operating cash flow INI $ $ $ $ $ Payback period NPV IRR OCF NI add dep pay tax OCF investment $ $ $ S $ $ $ $ $ $ $ $ $ $ s s $ SO $0.00 NPV less invest NPV S S s $ IRR #NUM: s S Payback Payback S #DIV/0! Chapter 9 Question 22 Input area: : $ $ Marketing study Sales/year Fixed costs Variable costs % of sales) Equipment Product life Tax rate Required return 120.000 835.000 204,000 20% 865,000 $ 23% 13% Output area: yr 0 yr 1 yr 2 yr 3 yr 4 yr O $ $ $ $ Sales Variable costs Fixed costs Depreciation EBT Tax (23%) Net income sales Vo FC Dep total costs $ $ $ $ $ $ NIBT tax $ $ $ $ $ Operating cash flow INI $ $ $ $ $ Payback period NPV IRR OCF NI add dep pay tax OCF investment $ $ $ S $ $ $ $ $ $ $ $ $ $ s s $ SO $0.00 NPV less invest NPV S S s $ IRR #NUM: s S Payback Payback S #DIV/0