Aero Motorcycles is considering opening a new manufacturing facility in Fort Worth to meet the demand for a new line of solar-charged motorcycles who wants to ride on a cloudy day at the promed project has the finger The firm just spent $300.000 for a marketing study to determine consumer demand 10- Ars Motorcycles purchased the land the factory will be built on 5 years ags for $2.000.000 and owns outright that is, it does not have a mortgage. The land has a current market of $2.600.000 The project has an initial cost of $20.000.000 secluding and hit the land is not subject to deprecat If the project is undertaken at to the company will need to increase its inventories by $3.500.000, accounts receivable by $1.500.000, and its accounts payable by 12.000.000. The net operating working capital will be recovered at the end of the pre- the project is undertaken the company will realize an additional $6.000.000 in sales over each of the next ten years. De sales in each year are $8,000,000 The company's sperating out not including depreciation will soul 50% of The company's tax rates 35 percent Lea 10-year aghline depreciation schedule Att-10 the project is expected to cease being economically viable and the factory (including and will be sold for $4.500.000 assume and has a book value to the orginal puthane The WACC-10 pent Assume the profitable and able to use any tax credits is negative What is the total cash flow at t-10 Round to nearest whole da Question 5 2p Aero Motorcycles is considering opening a new manufacturing facility in Fort Worth to meet the demand for a new line of salar-charged motorcycles who wants to ride on a cloudy day anyway) The pposed propt has the wing feature The Arm just spent $300.000 for a marketing study to determine consume demand 100 A Motorcycles purchased the last the factory will be built on 5 years ago for $2.000.000 and owns it outright that it does not have a mortgage. The land has a market of $253441 The project has an inal cost $20.000.000 (exciting and at the land is not subject to depreciation end of the projects - the project is undertaken at 1-0 the company will need to increase its inventories by $1.500,000 accounts receivable by $1.500,000 and its accounts payable by $2.000.000 This net operating working capital will be recovered at t the project is undertaken the company will real an additional $8.000.000 in sales over each of the next ten years e sales in each year are $8.000.000 The company's operating cost int induding depreciation will equal 50% The company's taxa 25 percent Uhe a 10-year straight-line depreciation sched Att-10 the project is expected to cease bring economically viable and the factory including and will be sold for $4.500.000 lume and has a book ale egal to the purchase pr The WACC-10 Assume the firm is profitable and able to use anytas credits give taxes What is the projects NPV? Round to nearest whole dollar value 3p
