This new project will make avocado chips. It will cost $25,000,000 today for a new building and machines. We would invest in NWC equivalent of 10% of capital expenditure cost today.  We know that this project will bring in sales of $14,000,000 in the first year, growing at a rate of 25% for the first 2 years and growing at a rate of 12% for the next 4 years.  We employ a MACRS 7-year depreciation  scale for all CAPEX. In year-end 3, we will have to purchase $9,000,000 in new machines. Net working capital account will be 25% of sales for each year. Costs of goods sold will be 50% of sales until we get the new machines at which they will drop to 38% of sales. After year 6, we are quitting the entire project and liquidating all, we can sell the original machines for $4million and the new machines for $4million. This project is in line with a new product division that has similar risk levels to existing operations.

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Project 1 Info Capex, year NWC, year 0 Sales, year 1 sales growth, yr 12 sales growth, next 4 Capex, year 3 COGS, yrs 1, 2, 3 COGS, yrs 4, 5, 6 NWC % of sales SV, original SV, new Project 1 Info Capex, year NWC, year 0 Sales, year 1 sales growth, yr 12 sales growth, next 4 Capex, year 3 COGS, yrs 1, 2, 3 COGS, yrs 4, 5, 6 NWC % of sales SV, original SV, new

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