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Q$1.$ The Majestic Mulch and Compost Company $($MMCC$)$ is investigating the feasibility of a new line of power mulching tools aimed at the growing number of home composters. Based on exploratory conversations with buyers for large garden shops, MMCC projects unit sales as follows: YEAR UNIT SALES $13,00025,00036,00046,50056,00065,00074,00083,000$ The new power mulcher will sell for $$120$ per unit to start. When the competition catches up after three years, however, MMCC anticipates that the price will drop to $$110.$The power mulcher project will require about $20\%$ of the first year sales revenue in net working capital at the start. The variable cost per unit is $$60,$ and total fixed costs are $$25,000$ per year. It will cost about $$800,000$ in total to buy the equipment necessary to begin production. This investment is primarily in industrial equipment, which qualifies as seven$-$year MACRS property. The equipment will be worth about $20$ percent of its cost in eight years. The relevant tax rate is $34$ percent, and the required return is $15$ percent. Based on this information, should MMCC proceed? USING SPREADSHEET SOFTWARE SUCH AS MS EXCEL OR GOOGLE SHEET, please prepare the followings SIMILAR TO THE FORMAT LAID OUT IN THE TEXTBOOK OR THE LECTURE NOTES OR YOU CAN DOWNLOAD THIS TEMPLATE TO COMPLETE THE ASSIGNMENT. A$.$ The initial capital outlay for the project. B$.$ The income statement for the project. C$.$ The incremental annual cash flow of the project. D$.$ The terminal cash flow of the project, and finally, E$.$ The NPV analysis and decide whether the company should invest in this project with justifications. Q$2$ You are the owner of a small and successful firm with an estimated marketvalue of $$50$ million. You are considering going public.A$.$ What are the considerations you would have in choosing an investmentbanker?B$.$ You want to raise $$20$ million in new financing, which you plan toreinvest back in the firm. $($The estimated market value of $$50$ million isbased on the assumption that this $$20$ million is reinvested.$)$ Whatproportion of the firm would you have to sell in the IPO to raise $$20$million?C$.$ How would your answer to B change if the investment banker plans tounder$-$price your offering by $10\%?$D$.$ If you wanted your stock to trade in the $$2025$ range, how many shareswould you have to create? How many shares would you have

to issue?

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