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Valuable Corporation (the company) plans to expand its operations(the project). In order to execute its plan, the company needs to replace its existing machine with a new one, which will cost $600,000. The new machine has a useful life of four (4) years after which it can be sold for $25,000. The project also has a life of four (4) years. In addition, the company expects to make an investment of $30,000 in Net Working Capital to operate the new machine, which will be recovered at the end of the project. As a result of this investment, the company expects to increase its revenues by $600,000 per year. Incremental Variable Operating expenses per year are estimated at 30% of incremental revenues per year. The project will also require a fixed expense of $20,000 per year. Additionally, the new machine is capable of recyclycing the production waste, which will save the Company $10,000 per year (this will be an added benefit as the Company is currently paying a third party to recycle production waste). The company has a tax rate of 35%, and its cost of capital or discount rate is 12%. The CCA rate (depreciation rate) for the equipment is 25%. Based on the information above, answer the following using the table given in the next page (round your answers to the nearest dollar): a) Calculate incremental revene and costs of the project. (2 marks) b) Calculate the net income of the project. (2 marks) c) Calculate incremental cash flow of the project (1 marks) d) Calculate the free cash flows of the project (2 marks) d) Calculate NPV of the project (2 marks) e) Should AllRight accept or reject the project? (1 mark)

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