3 Year Project Cash Flows
3 year project
Initial Fixed Investment = 2,900,000
Nonrefundable R&D = 100,000
Depreciation: 3 Year MACRS Schedule (33.33%, 44.45%, 14.81%, 7.41%)
Annual Sales = 2,737,500 (20% from existing products)
Annual Costs = 815,000
Initial NWC Investment = 300,000
Additional NWC Investment = 100,000 per year
Fixed Market Value of 210,000 at the end of the project
Tax Rate = 21%
Required Return = 12%
Find the following:
a. Year 0 Net Cash Flow
b. Year 1 Operating Cash Flow
c. Year 1 Net Cash Flow
d. Year 2 Net Cash Flow
e. Year 3 Net Cash Flow
f. NPV of Project
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