Use the attached pro-forma data to develop an initial estimate of NPV. Comment in any way you feel is appropriate based upon your findings.

PROJECT SCENARIO Suppose you are analyzing a project with the following pro-forma parameters: Initial Investment (P&E) $6.2 million OCF 1 $1.1 million Terminal Salvage Value $0 Marginal Tax Rate 40% Initial Working Capital $785,000 OCF 2 - 4 $2.7 million Flotation Cost % 6% Required Return 12% Working Capital Recovery 100% OCF 5 $750,000 Depreciation S/L to Zero over 5 Years Project Life 5 TASK ONE: USE THE ABOVE PRO-FORMA DATA TO DEVELOP AN INTIAL ESTIMATE OF NPV. COMMENT IN ANY WAY YOU FEEL IS APPROPRIATE BASED UPON YOUR FINDINGS