1. A firm is considering a project with the following information:

Project will require purchase of a machine for $104,052.00 that is MACRS depreciable over a five-year schedule. (no depreciation until end of year 1).

Project will require immediate non-depreciable expenses of $26,558.00 TODAY (year 0).

Project will have the following projected balance sheet values of NWC:

YEAR	0	1	2
NWC Level	$4,000	9.00% of sales	9.00% of sales

Sales for the project will be $55,349.00 per year, with all other expenses (excluding depreciation) at 51.00% of sales.

The tax rate for the firm is 37.00%, while the cost of capital is 10.00%

*assume project goes beyond two years

What is the projects cash flow for year 2?

2.

Over the past six months, Six Flags conducted a marketing study on improving their park experience. The study cost $3.00 million and the results suggested that Six Flags add a kid's only roller coaster.

Suppose that Six Flags decides to build a new roller coaster for the upcoming operating season. The depreciable equipment for the roller coaster will cost $50.00 million and an additional $5.00 million to install. The equipment will be depreciated straight-line over 20 years.

The marketing team at Six Flags expects the coaster to increase attendance at the park by 5%. This translates to 110,998.00 more visitors at an average ticket price of $39.00. Expenses for these visitors are about 10.00% of sales.

There is no impact on working capital. The average visitor spends $20.00 on park merchandise and concessions. The after-tax operating margin on these side effects is 35.00%. The tax rate facing the firm is 39.00%, while the cost of capital is 10.00%.

What is the project cash flow for year 0? (answer in terms of MILLIONS)