1) Useful life of the equipment (years) 2) New equipment cost* 3) Equipment ship & install costs* 4) Related equipment start-up costs* 5) Inventory increase 6) Accounts payable increase 7) Equipment salvage value (end of life) 8) Projected sales for year 1 9) Projected sales growth per year Low Case Base Case High Case $(200,000) $ (35,000) $ (5,000) $ 25,000 $ 5,000 $ 15,000 $ 200,000 2% 5% 8% 10) Operating cost (as a % of sales) 11) Depreciation (straight line) per year 12) Corporate marginal tax rate (T) 13) Cost of capital or discount rate (r) -60% $(120,000) $ (60,000) 21% 10% *Note: Equipment cost, shipping and installation, and start-up costs are all depreciated with equipment