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a . Calculate the project's initial Year 0 cash flow, taking into account all side effects. Assume that the net working capital will not require

a. Calculate the project's initial Year 0 cash flow, taking into account all side effects. Assume that the net working capital will not require flotation costs. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g.,i,234,567.)
b. The new RDS project is somewhat riskier than a typical project for DEI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of 2 percent to account for this increased riskiness. Calculate the appropriate discount rate to use when evaluating DEl's project. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.,32.16.)
c. The manufacturing plant has an eight-year tax life, and DEI uses straight-line depreciation. At the end of the project (that is, the end of Year 5), the plant and equipment can be scrapped for $4.3 million. What is the aftertax salvage value of this plant and equipment? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g.,1,234,567.)
d. The company will incur $6,600,000 in annual fixed costs. The plan is to manufacture 16,000 RDSs per year and sell them at $10,700 per machine; the variable production costs are $9,300 per RDS. What is the annual operating cash flow (OCF) from this project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g.,1,234,567.)
e. DEl's comptroller is primarily interested in the impact of DEl's investments on the bottom line of reported accounting statements. What will you tell her is the accounting break-even quantity of RDSs sold for this project? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g.,32.)
f. Finally, DEl's president wants you to throw all your calculations, assumptions, and everything else into the report for the chief financial officer; all he wants to know is what the RDS project's internal rate of return (IRR) and net present value (NPV) are. (Do not round intermediate calculations. Enter your NPV answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g.,1,234,567.89. Enter your IRR answer as a percent rounded to 2 decimal places, e.g.,32.16.)
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