Finance Question:

Please help, I just need help knowing how to set up the calculations.

Please give detailed explanations to find each:

1)Year 0 Net Capital Spending?

2)Depreciation expense for machine in Year 3?

3)Machine after-tax salvage Year 5?

4)Year 1 operating cash flow?

5)Year 0 cash flow (CF)?

6)Year 1 cash flow (CF)?

7)Year 3 cash flow (CF)?

8)Year 5 cash flow (CF)?

9)Net Present Value of project?

The Info in General Terms with

Representing Variables:

Land lot purchased 20 years ago:

20

Cost of the land lot:

$L

Cost of Land lot improvements:

$M

Appraisal of the land lot:

$A

Project to last 5 years:

5

New equipment installed estimated:

(Depreciated straight-line to zero over life of project)

$E

With cost annually of:

$Y

Net working capital required of:

$NWC

Discount rate:

%R

Tax rate:

%T

Equipment can be sold after project complete for:

$S

Sales project will generate:

$G

Thank you!!!