2.	Calculate the NPV of a project that your company is considering. Use the assumptions in yellow.
	DCF Analysis	NPV
	(in $1000's)
		2013	2014	2015	2016	2017	2018	2019	2020
	Key Assumptions
	Unit Sales		2000	4000	5700	6700	7450	3712	1816
	Inflation Rate		2.0%	2.5%	3.0%	3.5%	4.0%	4.0%	4.0%
	Cost of Capital		9.0%	9.2%	9.4%	9.6%	9.8%	10.0%	10.2%
	Tax Rate		35.0%	35.0%	35.0%	35.0%	35.0%	35.0%	35.0%
	Discounting
	Discount Rate = Cost of Capital		11.2%
	Cumulative Discount Factor		11.2%	11.2%
	Price or Cost / Unit
	Sales / Unit		$9.69
	Variable Cost / Unit		$7.86
	Cash Fixed Costs		$5,320
	Cash Flow Forecasts
	Sales
	Variable Costs
	Gross Margin
	Cash Fixed Costs
	Depreciation
	Total Fixed Costs
	Operating Profit
	Taxes
	Net Profit
	Add Back Depreciation
	Operating Cash Flow
	Investment in Plant & Equipment	($10,826)							$1,210
	Cash Flows
	PV of Annual Cash Flow
	Net Present Value