Question 10 5.55 pts As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The purchase price of the equipment, including installation, is 565,000, and the equipment will be fully depreciated att -0. Annual sales would be 4.000 units at a price of 550 per cartridge, and the projects life would be 3 years. Current assets would increase by $5,000 and payables by $3.000. At the end of 3 years, the equipment could be sold for 510.000. Variable costs would be 70% of sales revenues foved costs would be $30,000 per year, the maripinal tax rate is 25%, and the corporate WACC is 11% The firm's project CVs generally range from 10 to 1.8. A 3% risk premium is added to the WACCI the initial CV exceeds 15, and the WACC is reduced by 0.5% if the CV is 0.75 or less Then a revised NPV is calculated What are the revised values for standard deviation, and coefficient of variation? Standard deviation of NPV = 5 . Coefficient of variation of NPV - D Question 11 5.55 pts As a financial analyst, you must evaluate a proposed project to produce printer Cartridges. The purchase price of the equipment, including installation is $65.000, and the equipment will be fully depreciated at t-0. Annual sales would be 4,000 units at a price of $50 per cartridge, and the project's lite would be 3 years. Current assets would increase by $5,000 and payables by $3.000. At the end of 3 years, the equipment could be sold for $10.000. Variable costs would be 70% of sales revenues, foued costs would be $30,000 per year, the marginal tax rate is 25%, and the corporate WACC is 11% The firm's project CVs generally range from 1.0 to 15. A 3% risk premium is added to the WACCH the initial CV exceeds 1.5, and the WACC is reduced by 0.5% if the CV is 0.75 or less. Then a revised NPV is calculated Would you recommend that the project be accepted! Accept project Reject project ere to search i Question 10 5.55 pts As a financial analyst, you must evaluate a proposed project to produce printer cartridges. The purchase price of the equipment, including installation, is 565,000, and the equipment will be fully depreciated att -0. Annual sales would be 4.000 units at a price of 550 per cartridge, and the projects life would be 3 years. Current assets would increase by $5,000 and payables by $3.000. At the end of 3 years, the equipment could be sold for 510.000. Variable costs would be 70% of sales revenues foved costs would be $30,000 per year, the maripinal tax rate is 25%, and the corporate WACC is 11% The firm's project CVs generally range from 10 to 1.8. A 3% risk premium is added to the WACCI the initial CV exceeds 15, and the WACC is reduced by 0.5% if the CV is 0.75 or less Then a revised NPV is calculated What are the revised values for standard deviation, and coefficient of variation? Standard deviation of NPV = 5 . Coefficient of variation of NPV - D Question 11 5.55 pts As a financial analyst, you must evaluate a proposed project to produce printer Cartridges. The purchase price of the equipment, including installation is $65.000, and the equipment will be fully depreciated at t-0. Annual sales would be 4,000 units at a price of $50 per cartridge, and the project's lite would be 3 years. Current assets would increase by $5,000 and payables by $3.000. At the end of 3 years, the equipment could be sold for $10.000. Variable costs would be 70% of sales revenues, foued costs would be $30,000 per year, the marginal tax rate is 25%, and the corporate WACC is 11% The firm's project CVs generally range from 1.0 to 15. A 3% risk premium is added to the WACCH the initial CV exceeds 1.5, and the WACC is reduced by 0.5% if the CV is 0.75 or less. Then a revised NPV is calculated Would you recommend that the project be accepted! Accept project Reject project ere to search