Projected Net cash Flows Estimation Statement YEARS O 1 3 4 2015 2016 2017 2018 2019 Investment Outlays* Building\\ $ 12 , 000 Equipment* $8, 000 Operating Cash Flows Over the Project's Life* Units sold 20 , 000 20 , 000 20 , 0 0 20, 000 sales price* $ 3. 00 $3. 06 $3 . 12 $3 . 18 Sales revenue S 60, 000 61 , 200 62 , 424\\ 63 , 672 5 Variable costs 42 , 000 42 , 840 43, 697 44 , 571 Fixed operating costs 8 , 000 8 , 080 8 , 161 8 , 242 Depreciation ( building )* 156 312 312 312 Depreciation ( equipment ) 1 , 600 2 , 560 1 , 520 960 Operating income before taxes ( EBIT ) 8 , 244 7, 408 8 , 734 9 , 587 Taxes on operating income ( 40% ) 3 , 298 2 , 963 3 , 494 3 , 835 Net operating profit after taxes ( NOPAT ) 4 , 946 4 , 445 5 , 241 5 , 752 Add back depreciation 1 , 756 2 , 872 1 , 832 1 , 272 Operating cash flow S 6 , 702\\ 7 , 317\\ S 7, 073 { 7 , 024 Cash Flows Due to Net Operating Working Capital Net Operating Working Capital ( based on sales ) $6 , 000 56 , 120 $6 , 242 56 , 367 SO Cash flows due to investment in NowC* ( 56 , 000 ) ( $ 1 20 ) ( $ 1 2 2 ) ( 5125 ) $6 , 367 Salvage Cash Flows : Long - Term Assets* Net salvage cash flow : Building* $8, 863 Net salvage cash flow : Equipment* $1 , 744 Total salvage cash flows* $10 , 607 Net Cash Flow ( Time line of cash flows ) ( $ 26 ,000 ) $6 , 582 $7 , 194 $6 , 948 $23 , 999