1. What is the Free Cash Flow at the end of the year 2?

2. What is the Cash Flow from Operation at the end of the Year 1?

3. What is the amount of Working capital recovered at the end of the project?

4. How much is the capital gain/loss at the end of the project?

(Show the working as well)

Below is the information on a project that you are evaluating for deciding on its worthiness as an investment. ABC company is considering a new investment whose data are shown below. WACC for the project under consideration Net investment in fixed assets (immediate) Required new working capital (immediate) Working capital from the end of the first year onwards as a Percentage of Sales Straight-line deprec. Rate (every year end from the end of year 1) Sales revenues (starting at the end of year 1) Operating cost excluding depreciation, (starting at the end of year 1) Tax Rate Annual Increase in Operating Costs each year from year 2 onwards Annual increase in Sales revenue from the end of the year 2 onwards Depreciation: Fixed assets to be fully depreciated in books using the straight line method over 4 years to zero Salvage value of the fixed assets at the end of the project life 10% 75000 15000 25% 33.33% 75000 25000 35% 5% 6% 9750