after tax WACC: 10.10%   investment related cash flows: invoice price of machinery: $500,000 shipping charges: $35,000 installation cost: $10,000 deprciable basis: $545,000 salvage value: $95,000 investment in net working captial: 20% of next years sales tax rate: 30%   depreciation rates: year 1: 0.3333 year 2: 0.4445 year 3: 0.1481 year 4: 0.0741   operating cash flows: projects economic life: 4 years year 1 unit sales: 3,200 units unit growth: 4% year 1 price per unit: $250.00/unit year 1 cost per unit: $185.00/unit inflation rate: 2.5%

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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I need help finding the after tax salvage value, investment in net working capital, net cash flows, present value of net cash flows, and NPV.

 

after tax WACC: 10.10%

 

investment related cash flows:

invoice price of machinery: $500,000

shipping charges: $35,000

installation cost: $10,000

deprciable basis: $545,000

salvage value: $95,000

investment in net working captial: 20% of next years sales

tax rate: 30%

 

depreciation rates:

year 1: 0.3333

year 2: 0.4445

year 3: 0.1481

year 4: 0.0741

 

operating cash flows:

projects economic life: 4 years

year 1 unit sales: 3,200 units

unit growth: 4%

year 1 price per unit: $250.00/unit

year 1 cost per unit: $185.00/unit

inflation rate: 2.5%

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