eBook

New$-$Project Analysis

the nearest dollar.

a$.$ What is the Year$-0$ net cash flow?

$

b$.$ What are the net operating cash flows in Years $1,2,$ and $3?$

Year $1$:$

Year $2$:$

Year $3$:$

c$.$ What is the additional Year$-3$ cash flow $($i$.$e$,$ the after$-$tax salvage and the return of working capital$)?$

$

d$.$ If the project's cost of capital is $14\%,$ what is the NPV of the project?

$

Should the machine be purchased?

$-$Select$-$