Notes:

Use $2$ Decimals

It is advisable to solve the question using Excel or on paper, and then put your relevant answers here:

Depreciable base SAR is

A$1.$ New Machine:

NOPAT $+$ Dep.

Year$0$

Year$1$

Year$2$

Year$3$

A$2.$ Cash Flows from Working Captial $($WC$)$:

Year$0$

Year$1$

Year$2$

Year$3$

$(-)$ change in NOWC$*$

$0$

$0$

$*$make sure to put the correct sign A$3.$ Cash Flows from the Initial Outlay $($IO$)$:

A$4.$ Cash Flows from Terminal Cash Flows $($TCF$)$:

A$5.$ Free Cash Flows for New Machine $($FCF$\_$new$)$:

Year$1$

Year$2$

Year$3$

B$1.$ Existing Machine:

NOPAT $+$ Dep.

Year$0$

Year$1$

Year$2$

Year$3$

B$2.$ Cash Flows from Working Captial $($WC$)$:

Year$0$

Year$1$

Year$2$

Year$3$

$(-)$ change in NOWC$*$

B$3.$ Cash Flows from the Initial Outlay $($IO$)$:

Year$0$

$(-)1O^{**}$

$x$

$x$

$x$

$x$

$x$

$x$ B$4.$ Cash Flows from Terminal Cash Flows $($TCF$)$:

B$5.$ Free Cash Flows for Existing Machine $($FCF$\_$Old$)$:

$*$The sum of B$1-$B$4$

C$.$ Relevant CF:

Year$0$

Year$1$

Year$2$

Year$3$

Relevant FCF

D$.$ NPV $=$