FIND CHANGES IN NWC AND NET CAPITAL SPENDING

1 Pro Forma Income Statement Year 0 2 3 4 Sales $725,000 $725,000 $725,000 $725,000 $725,000 Variable Cos $145,000 145,000 145,000 145,000 145,000 Gross Profit $580,000 580,000 580,000 580,000 580,000 Fixed Costs $ 187,000.00 $ 187,000.00 $ 187,000.00 $ 187,000.00 $ 187,000.00 Depreciation 208750 208750 208750 208750 208750 EBIT 184,250 184,250 184,250 184,250 184,250 Taxes 73,700.00 73,700 73,700 73,700 73,700 Net Income 110,550.00 110,550 110,550 110,550 110,550 Cash Flows Operating Cash Flow 319,300 319,300 319,300 319,300 Changes in NWC Net Capital Spending Cash Flow F. $(835,000.00) $319,300.00 $319,300.00 $319,300.00 $319,300.00 Net Present $114,748.69 19.47% IRR