1) Life Period of the Equipment = 4 years				8) Sales for first year (1)			$200,000
2) New equipment cost			$(229,000)	9) Sales increase per year			5%
3) Equipment ship & install cost			$(35,000)	10) Operating cost:			$(120,000)
4) Related start up cost			$(8,000)	(60 Percent of Sales)		-60%
5) Inventory increase			$25,000	11) Depreciation (Straight Line)/YR			?
6) Accounts Payable increase			$5,000	12) Tax rate			35%
7) Equip. Salvage Value Estimated			$15,000	13) Cost of Capital (WACC)			9%
End of Year 4	(fully depreciated )
ESTIMATING Initial Outlay (Cash Flow, CFo, T= 0)
YEAR			CF0	CF1	CF2	CF3	CF4
			0	1	2	3	4
Investments:
1) Equipment cost
2) Shipping and Install cost
3) Start up expenses
Total Basis Cost (1+2+3)
4) Net Working Capital
Inventory Inc.- Acct. Payable Inc.			$(20,000)	$-	$-	$-	$-
Total Initial Outlay
Operations:
Revenue
Operating Cost
Depreciation
EBIT
Taxes
Net Income (LOSS)				XXXXXX	XXXXX	XXXXX	XXXXX
TAX SHIELD DUE TO LOSS
Add back Depreciation
Total Operating Cash Flow				XXXXX	XXXXX	XXXXX	XXXXX
Terminal (END of 4th YEAR)
1) Release of Working Capital				$-	$-	$-	$20,000
2) Salvage value (after tax)
Total							XXXXXX
Project Net Cash Flows			$-	$-	$-	$-	$
NPV = WACC or discount rate of the project = 9% NPV, IRR and Payback periods to be calculated under corporate tax 35% and 20%.			IRR =			Payback=