5. The firm must purchase manufacturing equipment costing $8 million. The equipment fell into the five-year MACRS depreciation category. Depreciation percentages for the first three years respectively were: 20%, 32%, and 19%. The cash outlay would be at Time 0, and depreciation would start in 2013. Analysts estimated the equipment could be sold for book value at the end of the projects life.

6. Inventory and accounts receivable would increase by $25 million at Time 0 and would be recovered at the end of the project (2015). The accounts payable balance was projected to increase by $10 million at Time 0 and would also be recovered at the end of the project.

11. The company's federal plus state marginal tax rate was 40%.

Not sure I did these right. Especially 11 for the "tax impact" portion since it's marginal and not effective. Please respond as soon as you reasonably can.

Year 0 1 2 3 2012 2015 HIKING BOOT 2013 2014 ($ mlns) $ 350 $ 402.5 $ 462.9 Hiking Market Market Share 15% 18% 20% $ 52.50 $ 72.45 92.58 Revenue (Market share x market size) $ Lost sales (Cannibalization) $ 52.50 $ 72.45 $ 92.58 Net Revenue Variable Cost (38% Revenue) (19.95) $ (27.53) $(35.18) (6.30) $ (7.25) $ $ SG&A (Yr 1 12%, Yr 2 10%, Yr 8% Revenue) (7.41) $ $ Endorsement $ $ $ Endorsement Bonus Other advertising $ (3) $ (2) $ (2) Depreciation-factory $ $ $ $ (1.60) $ $ (2.56) $ $ Depreciation -equipment (1.52) (50) $ $ Technology purchase (0.6) $ (28.95) 32.51 $ 45.87 $(11.58) 13.01 $18.35 $(17.37) 19.51 $27.52 Interest Costs* (0.6) $ (0.6) Operating Profit (EBIT) Tax Impact (40%) Operating Profit After Tax Plus Depreciation - factory $ 1.60 $ 2.56 $ Plus Depreciation - equipment 1.52 Net Change in Working Capital New Factory (Outlay/Salvage) New Equipment (Outlay / Salvage) $ (15) $ 15 $ $ $ (8) 2.32 Project Cash Flows -23 -15.77 22.0684 46.3623 (C O