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Consider a project to supply Detroit with 25,000 tons of machine screws annually for automobile production. You will need an

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value of machine - $ 4,500,000 depreciation = 4500000 5 years = $900, 000 per year depreciated entire value of asset to be paa-1 calculation of operating cash flow = 2,550,000 Less: Total Contribution - 250000 102 Fixed expenditure depreciation = LOTNOTE: working of in capital requirements project becomes o hence Cash Inflows at the it is end added Cash Inflows = 1348500xworking capital requirements increases by Ist = 430,000 +15). = 494500 - selling price decreases by 5% i sales price = 300 -discounted Cash In flows = 1073850 x 3.6959 + (315900 + 494.500] x 0.5935 = 3968842.215 + 480972-4 = 4449814.615 N.p.v. 4, 44working capital decreases by 1st. - 430000 -15% = 365,500 Increases by st selling price .:sales price = 302 + 5% = 314.1 cont

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