A factory is considering a new expansion plan, which requires an initial investment of $ 100 million, it will last 5 years and is depreciated straight-line to a book value of 0. Salvage value of the new machinery at t=5 is $10 million. The project generates revenue of $50 million each of the 5 years and costs amount to 30% of revenues. At year 1, Inventory will rise by $2 million, and A/R will rise by $1 million. All working capital components return to original values at the end of the project's life. Firm tax rate is 40% and the WACC is 4%.

What is the after-tax salvage value (at t=5) of the machinery?

What is the after-tax EBIT in each of years 1 through 5?

What is the change in working capital in years 2 through 4?

What is the change in working capital in year 5?

What is the project FCFF in year1?

What is the project NPV?