Your event lighting company is thinking about investing in a bank of portable lights for sporting...

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Your event lighting company is thinking about investing in a bank of portable lights for sporting events. Your accounting department just brought you the following pro-forma accounting projections for a given bank of lights. These are in the Excel Answer File. Your job is to analyze this project from a financial perspective. Part a: If the tax rate is 40%, what is the incremental, unlevered net income of the project appropriate for project analysis in each year? Part b: What is the incremental free cash flow of the project in each year? Part c: What is the PI of the project if the required return is 8%? Your event lighting company is thinking about investing in a bank of portable lights for sporting events. Your accounting department just brought you the following pro-forma accounting projections for a given bank of lights. These are in the Excel Answer File. Your job is to analyze this project from a financial perspective. Part a: If the tax rate is 40%, what is the incremental, unlevered net income of the project appropriate for project analysis in each year? Part b: What is the incremental free cash flow of the project in each year? Part c: What is the PI of the project if the required return is 8%?

Answer rating: 100% (QA)

Part a Year 1 4800 Year 2 4800 Year 3 4800 Year 4 4800 Part b Year 1 2880 Year 2 2880 Year 3 2880 Ye... View the full answer