Proceed with these steps:

step one: read the Case Study

step two: make notes and and proceed with calculations in Excel spreadsheet (calculate missed numbers, highlighted in yellow)

step three: construct NPV profiles for projects

step four: submit the file

N.B. Refer to NPV and IRR techniques.

Exhibit TN1 Hightrek Inc. Free-Cash-Flow Analysis Project Assumptions \begin{tabular}{l|r} \hline Discount & 12% \\ \hline Investment & 180,000 \\ \hline Cash variable cost (\% of revenue) & 75% \\ \hline Cash fixed cost & 48,000 \\ \hline Tax rate & 28% \\ \hline Net working capital (NWC) to reve & 4% \\ \hline \end{tabular} Free-Cash-Flow Approach Year 1 Year 2 Year 3 Year 4 \begin{tabular}{|l|r|r|r|r|} \hline Revenues & 270,000 & 320,000 & 450,000 & 170,000 \\ \hline Cash variable expenses & 202,500 & 240,000 & 337,500 & 127,500 \\ \hline Cash fixed expenses & 48,000 & 48,000 & 48,000 & 48,000 \\ \hline Depreciation & 45,000 & 45,000 & 45,000 & 45,000 \\ \hline \end{tabular} Allowance for taxes \begin{tabular}{|r|r|r|r|} \hline(7,140) & (3,640) & 5,460 & (14,140) \\ \hline(18,360) & (9,360) & 14,040 & (36,360) \\ \hline \end{tabular} Net operating profit after tax (NOPAT) Plus depreciation Less capital expenditure (Capex) 180,000 Less the change in NWC Recovery of NWC NWC schedule Net present value (NPV) Internal rate of return (IRR)