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5. Bruno's Lunch Counter is expanding and expects operating cash flows (OCFs) of $26,000 a year for 4 years as a result. This expansion requires

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5. Bruno's Lunch Counter is expanding and expects operating cash flows (OCFs) of $26,000 a year for 4 years as a result. This expansion requires an initial investment of $80,000 in new fixed assets at Year 0. These assets will be worthless at the end of the project There is an initial investment of $10,000 in net working capital at Year 0. The net working capital will be liquidated at the end of the project. a. Fill out the following table. 4 Year 1 2 3 OCF Net capital spending (NCS) Chg. In NWC Project cash flow O Hint: project cash flow-OCF-Net capital spending-chg. In NWC, . For example, if OCF=100; NCS-2,000; Chg. In NWC-50, Project cash flow = 100 -2,000-(-50)- -1,850 b. What is the net present value (NPV) of this expansion project at a required rate of return of 10 percent? Should the company accept the project? c. What is the profitability index (PT) of this expansion project at a required rate of return of 10 percent? d. What is the IRR of this expansion project

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