A golf company needs to buy new items with a total cost of $103,000.All of this depreciable equipment will be 5-year MACRS property.The project is expected to operate for 6 years, at the end of which the equipment will be sold for 25% of its original cost.There is expected to be $33,000 of fixed costs each year other than depreciation.These fixed costs include the cost of leasing the land.

First year sale is expected to be $103,000 based on renting 20,600 buckets of balls @ $5 per bucket.For years 2-6, they expect the number of buckets rented to steadily increase by 1,100 buckets per year, while the price will remain constant @ $4.Expenditures needed for buckets and balls each year are expected to be 23% of the gross revenues for the year.

The company will be in the 35% tax bracket for all years in question.

The company has a required capital structure of 40% debt and 60% equity.They can issue new bonds to yield 5.5%. With respect to equity, the company's beta is 1.85 the expected return on the market is 12% and the risk-free rate is 7%.This helps to compute the company's WACC and then use the WACC as the required return.

For each year of the project, compute the profit margin and EPS (assuming that the firm has 16,000 shares of stock outstanding).Besides the net value of the fixed assets, the company also expects to have $20,000 of other assets. Compute the total assets for each year, use the 40%/60% ratio to determine the total amounts of liability and equity for each year, and use those figures to compute ROA and ROE for each year.

Please make a table for 0-6 years.

Sales

Variable Costs

Fixed Costs

Depreciation

EBIT

Taxes

Net Income

EBIT

Depreciation

Taxes

OCF

Net Capital Spending

Cash Flow from Assets

Present Value

NPV (just put overall NPV in Year 0 column)

Profit margin

EPS

Total Assets

Total Liabilities

Total Equity

ROA

ROE