1. Use the following information for the next 3 questions.

We need to invest a total of $60,000 in manufacturing equipment.

This $60,000 will be 100% depreciated over the three-year life of the project.

The project will require an initial $20,000 investment in NWC and the tax rate is 20%.

At the end of the projects life, the fixed assets will be worth $15,000, and the firm will recover $8,000 that was tied up in working capital.

The OCF for the next 3 years is $32,000.

Calculate the CFFA in Yr 0 .

_________

2. Calculate the CFFA in Yr 3.

(A) 51000

(B) 54000

(C) 53000

(D) 52000

3. Calculate the NPV of this project with a discount rate of 18%.

[Hint: the CFFA of Year 1 and Year 2 is $32,000]

Round-off to an INTEGER