(Solved by Humans)-Problem 24-36 BASIC NET PRESENT VALUE ANALYSIS Camus Blalack, process engineer, knows that the...

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  Problem 24-36  BASIC NET PRESENT VALUE ANALYSIS Camus Blalack, process engineer, knows that the acceptance of a new process design will depend on its economic feasibility. The new process is designed to improve envi- ronmental performance. On the negative side, the process design requires new equip- ment and an infusion of working capital. The equipment will cost $300,000, and its cash operating expenses will total $60,000 per year. The equipment will last for seven years but will need a major overhaul costing $30,000 at the end of the fifth year. At the end of seven years, the equipment will be sold for $24,000. An increase in work- ing capital totaling $30,000 will also be needed at the beginning. This will be recov- ered at the end of the seven years.   On the positive side, Camus estimates that the new process will save $135,000 per year in environmental costs (fines and cleanup costs avoided). The cost of capital is 10 percent.   Required: 1.        Prepare a schedule of cash flows for the proposed project. Assume that there are no income taxes. 2.        Compute the NPV of the project. Should the new process design be accepted?