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Capital Budgeting/Investment Analysis: Parting Way, Inc. has developed a new chemical hair loss preservative, which it hopes to introduce as a new product Management has estimated a four-year life for the product and unit sales have been forecast under three different economic scenarios. Unit sales Year Optimistic Most Likely Pessimistic 5,000 4,000 2,000 8,000 7,000 4,000 10,000 8,000 5,000 5,000 4,000 2,000 The project would cost $500,000 in new plant and equipment, including all installation costs, which would be depreciated on a straight-line basis to a zero salvage value over its four year life. In addition, the following estimates have been made under the three possible scenarios. NWC required (Year 0) Selling Price per Unit Cash Operating Costs (per unit) Optimistic $300,000 $80 $30 Most Likely $200,000 $80 $40 Pessimistic $100,000 $80 $50 The firm's stock is presently selling for $20.00 with next year's dividend estimated at $1.90. The anticipated long-term growth of the company is estimated at 6.5% per year. The firm's combined Federal and State marginal tax rate is 25%. Required....Compute the NPV for the total project, given a 30% likelihood of an "optimistic" outcome, a 60% likelihood of a "most likely" outcome and a 10% likelihood of a "pessimistic" outcome. In addition, what performance return can be estimated for the product? Capital Budgeting/Investment Analysis: Parting Way, Inc. has developed a new chemical hair loss preservative, which it hopes to introduce as a new product Management has estimated a four-year life for the product and unit sales have been forecast under three different economic scenarios. Unit sales Year Optimistic Most Likely Pessimistic 5,000 4,000 2,000 8,000 7,000 4,000 10,000 8,000 5,000 5,000 4,000 2,000 The project would cost $500,000 in new plant and equipment, including all installation costs, which would be depreciated on a straight-line basis to a zero salvage value over its four year life. In addition, the following estimates have been made under the three possible scenarios. NWC required (Year 0) Selling Price per Unit Cash Operating Costs (per unit) Optimistic $300,000 $80 $30 Most Likely $200,000 $80 $40 Pessimistic $100,000 $80 $50 The firm's stock is presently selling for $20.00 with next year's dividend estimated at $1.90. The anticipated long-term growth of the company is estimated at 6.5% per year. The firm's combined Federal and State marginal tax rate is 25%. Required....Compute the NPV for the total project, given a 30% likelihood of an "optimistic" outcome, a 60% likelihood of a "most likely" outcome and a 10% likelihood of a "pessimistic" outcome. In addition, what performance return can be estimated for the product

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