1. Daily Enterprises is purchasing a $13,000,000 machine. The machine will depreciated using straight-line depreciation over its 8 year life and will have no salvage value. The machine will generate revenues of $5,000,000 per year along with costs of $2,500,000per year. If Daily's marginal tax rate is 27%, what will be the cash flow in each of years one to 8 (the cash flow will be the same each year)?Enter your answer rounded to the nearest whole number.
2. A project requires an increase in inventories, accounts payable, and accounts receivable of $115,000, $30,000, and $80,000, respectively. If opportunity cost of capital is 10% and the project has a life of 20 years, and the working capital investments will be recovered at the end of the life of the project, what is the effect on the NPV of the project?Enter your answer rounded to two decimal places.
3. A company will sell Gizmos to consumers at a price of $109 per unit. The variable costto produceGizmos is $29 per unit. The company expects to sell 17,000Gizmos toconsumers each year. The fixed costs incurred each year will be $240,000. There is an initial investment to produce the goods of $2,500,000 which will be depreciated straight line over the 9 year life of the investmentto a salvage value of $0. The opportunity cost of capital is 6% and the tax rate is 35%. What is operating cash flow each year?