All in Millions Criteria Year 0 Year 1 Year 2 Sales $0 -Cost of Goods Sold (COGS) (40%) $0 $45.000 ($18.000) ($32.000) ($33.920) $80.000 Year 3 $84.800 Year 4 $89.888 comments ($35.955) 40% * Sales - Fixed Operating Costs $0 Depreciation (MACRS for 3-year property class $0 - Depreciation $0 ($4.000) ($4.120) ($4.244) ($4.371) Given -33.33% -44.45% -14.81% -7.41% MACRS ($19.998) $(26.670) $ (8.886) $ (4.446) Deprec Taxable Income/EBIT $0 $3.002 $17.210 $37.750 -Taxes $0 $45.116 ($0.751) ($4.303) $ (9.438) $(11.279) 25% * EBIT Earnings after Taxes (a) NOPAT $0 $2.252 $12.908 $28.313 $33.837 + Adding back Depreciation $0 - Capital Investment ($60.000) + Net Salvage - NOWC Investment FCF WACC $0.000 ($0.90) ($60.900) $19.998 $26.670 $0.000 $0.000 $0.000 $0.000 ($1.600) ($1.696) $20.650 $37.882 $8.886 $4.446 $0.000 $0.000 $0.000 $4.500 Salvage Calc ($1.798) $0.00 $35.401 $42.783