A project is expected to create cash flows of $22,500 each year for three years. The initial cost of the fixed assets (FCI ) is $50,000. These assets will be worthless at the end of the project. An additional $3,000 of net working capital (WC) will be required at the beginning of L p the project, which can be recovered at the end of year 3 (the discount factor is 10% )

ii. The depreciation method used in the analysis is Straight line, Sum of Years Digits, Double Declining Balance, or MACRS over 7 years ?

iii. What is the assumed taxation rate used in the analysis ?

iv. What is the salvage value of the plant ?

Following non-discounted Cash Flow table (all figures are in $millions)

"Numbers in () represent negative values. * Land cost =10. 'Plant started up at end of year 3. ' Working capital =15. "Numbers in () represent negative values. * Land cost =10. 'Plant started up at end of year 3. ' Working capital =15