1. Your company is considering a new project whose data are shown below. What is the projects Year 1 cash flow? Sales revenue, each year $21,750 Depreciation $8,000 Other operating costs $12,000 Tax rate 35%

2. Your company is considering a new project whose data are shown below. The required equipment has a 3-year economic life, and it will be depreciated by the straight-line method. Revenues and other operating costs are expected to be constant over the projects life. What is the projects Year 3 cash flow? Equipment cost $23,000 Investment in net operating working capital $3,000 Salvage value $2,000 Sales revenue, each year $15,000 Operating costs (excluding depreciation) $4,000 Tax rate 35%

3. Temple Corp. is considering a new project whose data are shown below. The equipment that would be used has a 3-year, would be depreciated by the straight-line method over its 3-year life, and would have a zero salvage value. Revenues and other operating costs are expected to be constant over the projects life. What is the projects NPV? WACC 10% Equipment cost $60,000 Increase in NOWC $20,000 Sales, each year $80,000 Operating costs (excluding depreciation) $40,000 Tax rate 35%

4. Use data in Question 3. This equipment should be used with tool X the firm now owns, and if this equipment is not purchased, the tool X would be sold for $10,000. What is the projects Year 0 cash flow?