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4 Traid Winds Corporation, a firm in the 32 percent marginal tax bracket with a required rate of return ar discount rate of 10 percent,

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4 Traid Winds Corporation, a firm in the 32 percent marginal tax bracket with a required rate of return ar discount rate of 10 percent, is considering a new project. This project involves the introduction of a new product. The project is expected to last 5 years and then, because this is somewhat of a fnd product, it will be terminated. Given the following information below. Determine the free cash flows associated with the project, the project's net present value, the profitability index, and the internal rate of return. Apply the appropriate decision criteria. Cost of new plant and equipment: $14,200,000 Shipping and installation costs: $210,000 Unit sales: Year Units Sold 1 85,000 2 135,000 3 135,000 95,000 5 85,000 Sales price per unit: $310/unit in years 1 through 4, $260/unit in year 5 Variable cost per unit: $100/unit Annual fixed costs: $800,000 Working-capital requirements: There will be an initial working capital requirement of $170,000 to get production started. For each year, the total investment in net working cupita will be equal to 8 percent of the dollar value of sales for that year. Thus, the investment in wing capital will increase during years 1 when decrease in year 4. Finally, all working capital is liquidated at the termination of the projen, at the end of year 5. The depreciation method: Use the simplified straight-line method over 5 years. It is assumed that the plant and equipment win nave no salvage value after 5 years. Determine the free cash flows associated with the project. The FCF in year 0 is? The FCF in year 1 is? The FCF in year 2 is? The FCF in year 3 is? The FCF in year 4 is? The FCF in year S is? b. The net present value (NPV) of the project is? The profitability index (PI) of the project is? The internal rate of return (IRR) of the project is? a. Traid Winds Corporation, a firm in the 32 percent marginal tax bracket with a required rate of return or discount rate of 10 percent, is considering a new project. This project involves the introduction of a new product. The project is expected to last 5 years and then, because this is somewhat of a fad product, it will be terminated. Given the following information below. Determine the free cash flows associated with the project, the project's not present value, the profitability index, and the internal rate of return. Apply the appropriate decision criteria. Cost of new plant and equipment: $14,200,000 Shipping and installation costs: $210,000 Unit sales: Year Units Sold 1 85,000 2 135,000 3 135,000 4 95,000 85,000 Sales price per unit: $310unit in years 1 through 4, $260/unit in year 5 Variable cost per unit: $100/unit Annual fixed costs: $800,000 Working-capital requirements: There will be an initial working capital requirement of $170,000 to get production started For each year, the total investment in net working capital will be equal to 8 percent of the dollar value of sales for that year. Thus, the investment in working capital will increase during years 1 through 3. then decrease in year 4. Finally, all working capital is liquidated at the termination of the project at the end of years. The depreciation method: Use the simplified straight-line method over 5 years. It is assumed that the plant and equipment will have no salvage value after 5 years. Determine the free cash flows associated with the project The FCF in year 0 is? The FCF in year 1 is? The FCF in year 2 is? The FCF in year 3 is? The FCF in year 4 is? The FCF in year 5 is b. The nel present value (NPV) of the project is! The profitability index (PI) of the project is? d. The internal rate of return (IRR) of the project is

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