A company is adding a new line to their product mix Spent 100,000 over the last two years to rehabilitate the production site The machines invoice is $240,000. IT will have a four year life, but it is placed on MACRS 5 year class. Expected salvage value of $38,000 after 4 years. New line will generate 1,250 per year for four years. Production costs are $100 first year The units can be sold for $200 Sale price and cost expected to increase 3% per year. New working capital of the new line should be equal to the first year sales revenue. New product is expected to decrease sales of other lines in the firm by $50,000 per year. Tax rate 35% The firm is all equity: o $2.25 per dividend o $53.75 stock price o Dividends expected to grow 4% per year o Beta 1.17 o Treasury bills yield 3.45% o Market Risk premium: 4.85%

Could Someone explain how to calculate the following?

A projects Time 0 cash flow The after-tax salvage cash flow The annual operating cash flows, OCF (how to do for say 1-5 years) Cash flow from assets, CFFA The appropriate discount rate for a project The NPV IRR Payback period