Question
A firm has projected the following financials for a possible project: YEAR 0 1 2 3 4 5 Sales 138,180.00 138,180.00 138,180.00 138,180.00 138,180.00 Cost
A firm has projected the following financials for a possible project:
| YEAR | 0 | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|---|
| Sales | 138,180.00 | 138,180.00 | 138,180.00 | 138,180.00 | 138,180.00 | |
| Cost of Goods | 66,740.00 | 66,740.00 | 66,740.00 | 66,740.00 | 66,740.00 | |
| S&A | 30,000.00 | 30,000.00 | 30,000.00 | 30,000.00 | 30,000.00 | |
| Depreciation | 20,845.40 | 20,845.40 | 20,845.40 | 20,845.40 | 20,845.40 | |
| Investment in NWC | 1,141.00 | 506.00 | 506.00 | 506.00 | 506.00 | 506.00 |
| Investment in Gross PPE | 104,227.00 |
The firm has a capital structure of 30.00% debt and 70.00% equity. The cost of debt is 9.00%, while the cost of equity is estimated at 15.00%. The tax rate facing the firm is 34.00%. (Assume that you can't recover the final NWC position in year 5. i.e. only consider the change in NWC for each year)
What is the cash flow for year 1?
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Intermediate Financial Theory
Authors: Jean-Pierre Danthine, John B. Donaldson
2nd Edition
0123693802, 978-0123693808
