Question: please write and explain detail ABC company is considering a new project with information as below: Initial investment is equivalent to 2172670 (unit: billion USD)
ABC company is considering a new project with information as below: Initial investment is equivalent to 2172670 (unit: billion USD) Firm is executed free tax for the first years since the second year, firm has to pay tax rate is 20% per year Fixed asset is applied straight line method within 5 years with the residual value is o, liquidation of this asset is 200 billion USD and is recorded as other income Sale, expense and working capital as belows: 2172670 Year Initial cost Sale Operating expense Fixed expense Other income Working capital demand $ 2,500,000 Increase 10% with previous year increase 10% with previous year increase 10% with previous year increase 10k with previous year $ 2,000,000 $ 2,500,000 $ 3,000,000 $ 1,700,000 $ 2,000,000 S 200,000 $ 200,000 $ 200,000 $ 200,000 $ 200,000 200 billion USD $ 500,000 $ 600,000 $ 500,000 $ 800,000 interest rate is 12% per year a. compute the cash flow of this project
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