Business, 05.10.2021 14:00 vanessacasillas452

2016 2017 2018 2019 2020 2021 2022 Investment: Capital Outlay 16,000 2,000 0 0 0 0 0 Net Working Capital (10% Sales) 0 400 600 0 0 0 0 Total Investment 16,000 2,400 600 0 0 0 0 Investment Recovery : Equipment Salvage ($1,080) Net Working Capital (full recovery) (1,000) Earnings before Interest and Taxes (EBIT): Sales Revenue 4,000 10,000 10,000 10,000 10,000 10,000 Cost of Goods Sold (75% Sales) 75% (3,000) (7,500) (7,500) (7,500) (7,500) (7,500) SG&A (5% Sales) 5.0% (200) (500) (500) (500) (500) (500) Operating Savings 2,000 3,500 3,500 3,500 3,500 3,500 Depreciation ($18,000/6) (3,000) (3,000) (3,000) (3,000) (3,000) (3,000) Total Costs & Expenses (4,200) (7,500) (7,500) (7,500) (7,500) (7,500) EBIT - Taxes (40%) NOPAT + Depreciation - Investment = Free Cash Flow Present Value of Free Cash Flows Should the company undertake the project? Why or why not?

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2016 2017 2018 2019 2020 2021 2022 Investment: Capital Outlay 16,000 2,000 0 0 0 0 0 Net Working Cap...

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