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A firm is undertaking a project with the following details provided. The project costs $2 million and has a five-year service life. It generates revenues

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A firm is undertaking a project with the following details provided. The project costs $2 million and has a five-year service life. It generates revenues of$500,000 annually. The project is classified under a 7-year property under the MACRS rule. At the end of the fifth year, any assets held for the project will be sold. The expected salvage value will be 15% of the initial $2M project cost. The firm will finance 30% of the project money from an outside source with an interest rate of 12% The firm is required to repay the loan with five equal annual payments. The firms incremental marginal tax rate is 35% MARR is 15%. Given the information, Determine the end of year cash flows for years 0 through 5 Compute the Net Present Worth for this 5-year project Year 0____ Year 1____ Year 2____ Year 3_____ Year 4_____ Year 5_____ NPW_____

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