A.) Analyze the financial statements of selected company and estimate the cash flow for the next five years based on following assumptions,

i) Sales income of the project in the first year is equal to 60% of the sales revenue of the most recent year. The sales revenue is generated after the sale of 100,000 units.

ii) Sales will increase by 20% in the next two years (years 2 and 3), and sales in the last two years (years 4th & 5th) will increase by 15%. Suppose that the expected inflation rate for the next five years is 4% per year, and the selling price will rise to the expected inflation rate.

iii) Direct operating costs account for 40% of estimated sales revenue.

iv) The fixed operating expenses for the first year are 25% of the expected sales revenue for the first year and will increase the expected inflation rate.

v) The cost of fixed capital investment is more than twice the estimated sales revenue in the first year (closest million dollars), while fixed capital investment is less than 15% per year (deductible tax) on a simple linear basis. . The escape value of capital investment is 20% of the cost of fixed capital investment.

vi) Depreciation is the only non-cash item of the project, and the tax rate applicable to the company is 35%