Florida Car Wash is considering a new project whose data are shown below. The equipment to...

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Florida Car Wash is considering a new project whose data areshown below. The equipment to be used has a 3-year tax life, wouldbe depreciated on a straight-line basis over the project's 3-yearlife, and would have a zero salvage value after Year 3. No changein net operating working capital would be required. Revenues andother operating costs will be constant over the project's life, andthis is just one of the firm's many projects, so any losses on itcan be used to offset profits in other units. If the number of carswashed declined by 40% from the expected level, by how much wouldthe project's NPV change? (Hint: Note that cash flows are constantat the Year 1 level, whatever that level is.) Do not round theintermediate calculations and round the final answer to the nearestwhole number. WACC 10.0% Net investment cost (depreciable basis)$60,000 Number of cars washed 2,640 Average price per car $25.00Fixed op. cost (excl. depr.) $10,000 Variable op. cost/unit (i.e.,VC per car washed) $5.375 Annual depreciation $20,000 Tax rate35.0% a. -$33,499 b. -$33,834 c. -$31,154 d. -$38,859 e.-$28,474

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Florida Car Wash is considering a new project whose data areshown below. The equipment to be used has a 3-year tax life, wouldbe depreciated on a straight-line basis over the project's 3-yearlife, and would have a zero salvage value after Year 3. No changein net operating working capital would be required. Revenues andother operating costs will be constant over the project's life, andthis is just one of the firm's many projects, so any losses on itcan be used to offset profits in other units. If the number of carswashed declined by 40% from the expected level, by how much wouldthe project's NPV change? (Hint: Note that cash flows are constantat the Year 1 level, whatever that level is.) Do not round theintermediate calculations and round the final answer to the nearestwhole number. WACC 10.0% Net investment cost (depreciable basis)$60,000 Number of cars washed 2,640 Average price per car $25.00Fixed op. cost (excl. depr.) $10,000 Variable op. cost/unit (i.e.,VC per car washed) $5.375 Annual depreciation $20,000 Tax rate35.0% a. -$33,499 b. -$33,834 c. -$31,154 d. -$38,859 e.-$28,474