Etonic Inc. is considering an investment of ($250,000) in an asset with an economic life of five

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Etonic Inc. is considering an investment of \($250,000\) in an asset with an economic life of five years. The firm estimates that the nominal annual cash revenues and expenses will be \($200,000\) and \($50,000,\) respectively. Both revenues and expenses are expected to grow at 3 percent per year as that of the expected annual inflation. Etonic will use straight-line method to depreciate its asset to zero over the economic life. The salvage value of the asset is estimated to be \($30,000\) in nominal terms at the end of five years. The one-time NWC investment of \($10,000\) is required immediately. Further, the nominal discount rate for all cash flows is 15 percent. All corporate cash flows are subject to a 35 percent tax rate. All cash flows, except the initial investment and the NWC, occur at the end of the year. What is the project’s total nominal cash flow from assets in year 5?

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