Consider the following project being evaluated by your company: Initial price of the asset is $200,000 will require $15,000 transportation and $5,000 installation. Will be depreciated S/L over 4 years to a $5,000 salvage. Market value for the asset at end of 5 years is expected to be $12,000 (the asset will be operated for 5 years) Net investment in NWC in year 0 (at the initial period) of $30,000 Sales, first year, expected to be generated by the project $130,000 Annual cost of goods sold 60% of sales Annual sales growth rate 4% Marginal tax rate 30% Cost of capital 10%

1) Calculate the project cash outflow in year 0 (initial outlay)

2) Calculate annual operating cash flows for year 1-5 (OCF)

3) Calculate the projects terminal cash flow in year 5 (TCF)

4) Calculate the projects NPV, IRR