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Question 1: (6 pts) A four-year project has an initial fixed asset investment of $500,000,...

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Question 1: (6 pts) A four-year project has an initial fixed asset investment of $500,000, an initial NWC investment of $35,000 and an annual OCF of $50,000. The fixed asset is fully depreciated straight-line over the life of the project. At the end of the project, it will have the market value of $150,000. If the required return is 12% and tax rate is 21%, what is the project's EAC? Question 2: (10 pts) In Question 1, the projections for initial fixed asset investment, initial NWC investment (consider this as a simple cost), annual OCF and market value of fixed assets at the end of the project are all accurate to within 10 percent. Calculate best case and worse case NPV

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