Key Output: Part 1. Input Data NPV = MIRR = P1 = Equipment cost Net WC/Sales First year sales (in units) Sales price (per unit). Variable cost (per unit) Fixed costs $17,000 13% 1.500 $31.00 $27.001 $1,500 Market value of equipment at Year 4 Tax rate WACC Inflation $2,300 22% 10% 6.0% Part 2. Depreciation and Amortization Schedule Year Initial Cost Years 2 Accumulated Depreciation 3 4 19.0% 33.0% 17.0% 14.0% Equipment Deprn Rate MACRS Equipment Deprn, Dollars Ending Book Value: Cost - Accumulated Depreciation = Equipment ................. ........................................................ peene Part 3. Net Salvage Values, in Year 4 in Year 4 Book Value in Year 4 Expected Gain or Loss Taxes paid or tax credit Net cash flow from salvage 1 2 3 4 Part 4. Projected Net Cash Flows (Time line of Annual Cash Rows) Years 0 Investment Outlays at Time Zero: Equipment ..................... Operating Cash Flows over the Project's Life: Units sold Sales price (increased by inflation) Variable costs (increased by inflation) Sales revenue Variable costs Fixed operating costs (increased by inflation) Depreciation (equipment) Operating income before taxes (EBIT) Taxes on operating income (26%) After-tax operating income Add back depreciation Operating cash flow Terminal Year Cash Flows: Required level of net working capital Required investment in NWC Terminal Year Cash Flows: Net salvage value ................................................ Net Cash Flow (Time line of cash flows)