28 29 Year 0 $ Year 1 Year 2 1,225,000 $ 1,575,000 $ (367,500) (472,500) (270,000) (270,000) (399,960) (399,960) 187,540 $ 432,540 $ (39,383) (90,833) 148,157 $ 341,707 $ Year 3 1,050,000 (315,000) (270,000) (399,960) 65,040 (13,658) 51,382 $ S $ 548,117 $ 741,667 $ 451,342 30 31 Sales 32 Variable Costs 33 Fixed Costs 34 Depreciation 35 Earnings Before Taxes (EBT) 36 Tax 37 Net income 38 39 OCF 40 41 Capital Equipment Spending 42 After-tax Salvage Cash Flow 43 NWC 44 Total cash flow 45 46 47 Salvage Sales Price of Equipment 48 Book Value of Equipment 49 Taxes 50 After-tax Salvage Value Cash Flow $ (1,200,000) (150,000) 28 29 Year 0 $ Year 1 Year 2 1,225,000 $ 1,575,000 $ (367,500) (472,500) (270,000) (270,000) (399,960) (399,960) 187,540 $ 432,540 $ (39,383) (90,833) 148,157 $ 341,707 $ Year 3 1,050,000 (315,000) (270,000) (399,960) 65,040 (13,658) 51,382 $ S $ 548,117 $ 741,667 $ 451,342 30 31 Sales 32 Variable Costs 33 Fixed Costs 34 Depreciation 35 Earnings Before Taxes (EBT) 36 Tax 37 Net income 38 39 OCF 40 41 Capital Equipment Spending 42 After-tax Salvage Cash Flow 43 NWC 44 Total cash flow 45 46 47 Salvage Sales Price of Equipment 48 Book Value of Equipment 49 Taxes 50 After-tax Salvage Value Cash Flow $ (1,200,000) (150,000)