Question: Please help ASAP (10) 4. Perry's Products (Everything For The Modern Classroom) is considering manufacturing a new type of marker pen that will never run

 Please help ASAP (10) 4. Perry's Products ("Everything For The Modern

Please help ASAP

(10) 4. Perry's Products ("Everything For The Modern Classroom") is considering manufacturing a new type of marker pen that will never run dry. This three-year project requires an initial investment (i.e., at t=0) in equipment of $500,000. The equipment will be financed with a loan of $500,000 at 5% annual rate of interest; the loan will be repaid in full at the end of the project (i.e., at t=3). This project is expected to produce sales revenue of $300,000 per year for three years (i.e., sales revenue will be $300,000 at t=1, t=2, and t=3). Manufacturing costs are estimated to be $90,000 per year. At t=3, the company plans to sell the equipment for $100,000. The research and development costs of the new pen, which was developed last year, were $50,000. The equipment can be depreciated according to the three year MACRS schedule, which allows depreciation of 33.33% at t=1, 44.45% at t=2, 14.81% at t=3, and 7.41% at t=4. Depreciation will be based solely on the initial cost of the equipment (i.e., when calculating depreciation, ignore any salvage value). The project requires an investment in working capital. Specifically, at the beginning (i.e., t=0) of the project, $40,000 of working capital is required; thereafter, working capital is projected to be 20% of revenue. Working capital will be fully recovered at t=3. The corporate tax rate is 40%. The company's tax situation is such that it can make use of all applicable tax shields; to put this somewhat differently, overall Perry's Products is a very profitable company. In preparation for a capital budgeting analysis, calculate the cash flows from this project for t=0, t=1, t=2, t=3, and t=4. (10) 4. Perry's Products ("Everything For The Modern Classroom") is considering manufacturing a new type of marker pen that will never run dry. This three-year project requires an initial investment (i.e., at t=0) in equipment of $500,000. The equipment will be financed with a loan of $500,000 at 5% annual rate of interest; the loan will be repaid in full at the end of the project (i.e., at t=3). This project is expected to produce sales revenue of $300,000 per year for three years (i.e., sales revenue will be $300,000 at t=1, t=2, and t=3). Manufacturing costs are estimated to be $90,000 per year. At t=3, the company plans to sell the equipment for $100,000. The research and development costs of the new pen, which was developed last year, were $50,000. The equipment can be depreciated according to the three year MACRS schedule, which allows depreciation of 33.33% at t=1, 44.45% at t=2, 14.81% at t=3, and 7.41% at t=4. Depreciation will be based solely on the initial cost of the equipment (i.e., when calculating depreciation, ignore any salvage value). The project requires an investment in working capital. Specifically, at the beginning (i.e., t=0) of the project, $40,000 of working capital is required; thereafter, working capital is projected to be 20% of revenue. Working capital will be fully recovered at t=3. The corporate tax rate is 40%. The company's tax situation is such that it can make use of all applicable tax shields; to put this somewhat differently, overall Perry's Products is a very profitable company. In preparation for a capital budgeting analysis, calculate the cash flows from this project for t=0, t=1, t=2, t=3, and t=4

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