2. Produce projected capital budgeting cash flow statements for Mumtaz 2022 project for the six years...

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2. Produce projected capital budgeting cash flow statements for Mumtaz 2022 project for the six years (2022 -2027). Does Mumtaz 2022 appear viable from a quantitative standpoint? To answer this question, estimate the project's payback, net present value, and internal rate of return. 1. Mumtaz 2022 project was supposed to last six years. Assume the analysis was completed by the end of 2021. 2. The shoe's suggested retail price was $140. At the retail level, gross margins for high-end sports footwear ranged around 40%, meaning each pair sold netted Al-Manar $84. 3. Al-Manar marketing division predicted the following sales figures for Mumtaz 2022 based on market research and consideration of other previous athlete endorsements: Year 2022 2023 2024 2025 2026 2027 Pairs sold 360,000 480,000 660,000 600,000 540,000 270,000 4. The launch of Mumtaz 2022 would reduce sales of existing Al-Manar shoes in the first two years as follows: Lost sales: 2022: $7 million 2023: $3 million Assume the lost revenue had the same margins as Al- Manar. 4. The launch of Mumtaz 2022 would reduce sales of existing Al-Manar shoes in the first two years as follows: Lost sales: 2022: $7 million 2023:53 million Assume the lost revenue had the same margins as Al- Manar 5. The company needed d to establish a facility in Amman in order to produce the shoe. This necessitated an initial investment of $40 million, which would be depreciated on a 20-year straight-line basis. The building. according to the firm's analysts, will be sold for $19.4 million after the project is completed. When calculating yearly depreciation costs, this "salvage value" was not taken into account. 6. The firm must acquire $4.2 million in equipment quickly. The equipment would cost $0.6 million in freight and installation Equipment and freight installation costs were intended to be depreciated on a 6-year straight-line basis. After the project was completed, it was estimated that the equipment could be sold for $0.9 million. 7. Two of the company's working capital accounts were expected to expand promptly in order to manufacture Mumtaz 2022. To fill the supply chain. $3.8 million in inventory would be needed soon, and accounts payable would rise by $1.2 million. By 2023, accounts receivable would account for 8% of project revenue, inventories would account for 25% of the project's variable costs, and accounts payable would account for 20% of the project's variable costs. By the end of the sixth year, the project's working capital would be fully recovered. 8. Variable costs were forecasted to account for 55% of revenue. 9. Selling, general, and administrative expenses were expected to be $1.5 million per year. 10. The following expenditures for other advertising and promotion were estimated: Year 2022 2023 2024 2025 2026 2027 A&P Expense (millions) 545 545 54 11. Mumtaz 2022 has already cost Al-Manar 50.5 million in research and development. 12. Al-Manar project intended to be funded using a mix of equity and debt. The debr's interest charges were estimated to be around $0.3 million per year. The Al-Manar discount rate for new projects like this was 12% 13. Al-Manar's effective tax rate was 15% 2. Produce projected capital budgeting cash flow statements for Mumtaz 2022 project for the six years (2022 -2027). Does Mumtaz 2022 appear viable from a quantitative standpoint? To answer this question, estimate the project's payback, net present value, and internal rate of return. 1. Mumtaz 2022 project was supposed to last six years. Assume the analysis was completed by the end of 2021. 2. The shoe's suggested retail price was $140. At the retail level, gross margins for high-end sports footwear ranged around 40%, meaning each pair sold netted Al-Manar $84. 3. Al-Manar marketing division predicted the following sales figures for Mumtaz 2022 based on market research and consideration of other previous athlete endorsements: Year 2022 2023 2024 2025 2026 2027 Pairs sold 360,000 480,000 660,000 600,000 540,000 270,000 4. The launch of Mumtaz 2022 would reduce sales of existing Al-Manar shoes in the first two years as follows: Lost sales: 2022: $7 million 2023: $3 million Assume the lost revenue had the same margins as Al- Manar. 4. The launch of Mumtaz 2022 would reduce sales of existing Al-Manar shoes in the first two years as follows: Lost sales: 2022: $7 million 2023:53 million Assume the lost revenue had the same margins as Al- Manar 5. The company needed d to establish a facility in Amman in order to produce the shoe. This necessitated an initial investment of $40 million, which would be depreciated on a 20-year straight-line basis. The building. according to the firm's analysts, will be sold for $19.4 million after the project is completed. When calculating yearly depreciation costs, this "salvage value" was not taken into account. 6. The firm must acquire $4.2 million in equipment quickly. The equipment would cost $0.6 million in freight and installation Equipment and freight installation costs were intended to be depreciated on a 6-year straight-line basis. After the project was completed, it was estimated that the equipment could be sold for $0.9 million. 7. Two of the company's working capital accounts were expected to expand promptly in order to manufacture Mumtaz 2022. To fill the supply chain. $3.8 million in inventory would be needed soon, and accounts payable would rise by $1.2 million. By 2023, accounts receivable would account for 8% of project revenue, inventories would account for 25% of the project's variable costs, and accounts payable would account for 20% of the project's variable costs. By the end of the sixth year, the project's working capital would be fully recovered. 8. Variable costs were forecasted to account for 55% of revenue. 9. Selling, general, and administrative expenses were expected to be $1.5 million per year. 10. The following expenditures for other advertising and promotion were estimated: Year 2022 2023 2024 2025 2026 2027 A&P Expense (millions) 545 545 54 11. Mumtaz 2022 has already cost Al-Manar 50.5 million in research and development. 12. Al-Manar project intended to be funded using a mix of equity and debt. The debr's interest charges were estimated to be around $0.3 million per year. The Al-Manar discount rate for new projects like this was 12% 13. Al-Manar's effective tax rate was 15%