2nd pic is the hint. thanks!

A firm is considering a project with the following information: - Project will require purchase of a machine for $108,104.00 that is MACRS depreciable over a five-year schedule. (no depreclation until end of year 1). - Project will require immediate non-depreclable expenses of \$28,267.00 TODAY (year 0). - Project will have the following projected balance sheet values of NWC: - Sales for the project will be $53,271.00 per year, with all other expenses (excluding depreciation) at 46.00% of sales. - The tax rate for the firm is 38.00%, while the cost of capital is 12.00% tassume project goes beyond two years What is the project's cash flow for year 1? Answer format: Currency: Round to: 2 decimal places. A firm is considering a project with the following information: - Project will require purchase of a machine for $100,000 that is MACRS depreciable over a five-year schedule. (no depreciation until end of year 1). - Project will require immediate non-depreciable expenses of \$30,000 TODAY (year 0). - Project will have the following projected balance sheet values of NWC: - Sales for the project will be $50,000 per year, with all other expenses (excluding depreciation) at 50% of sales. - The tax rate for the firm is 40%, while the cost of capital is 12% What is the project's cash flow for year 1 ? SOLUTION: FFF1=( Sales - Expenses Depreciation )x(1T)+ Depreciation NWCG ross PPESide Effects We need depreciation and the investment in NWC before solving the equation: Using the 5-year MACRS, D1=20%$100,000=$20,000 For NWC, we want the change from year 0 to year 1 . The balance sheet value of NWC is 10% of sales each year. For year 1 , sales is $50,000, so the total NWC required is 10%$50,000 or $5,000. The investment for the year is then: NWC1=10%Sales=,10$50,000=$5,000NWC1=NWC1NWC0=$5,000$4,000=$1,000 The project cash flow is then: FCF1=($50,00050$50,000$20,000)(1,40)+$20,000$1,000$0$0=$22,000