What is the terminal cash flow?

if the company has 30% tax rate

the projected is expected to last 5 years

cost of new equipment is $10,000,000

Sale price per unit: $280 (1y to 4 year) / $180 per unit in 5 year

(1 year - 70,000 units sold/ 2year - 100,000 units sold/ 3 year- 140,000 units sold/ 4 year -70,000 units sold/ 5 year - 60,000 units sold)

variable cost per unit $140

annual fixed cost is $300,000

working capital $100,000 (for each year, the total investment in working capital will be 10% of the dollar valye of sales for that year)

doesnt have salvage valye after 5 years

Answer rating: 100% (QA)

To calculate the terminal cash flow we need to determine the cash flow in the final year Year 5 and ... View the full answer