Calculate Cash Flow and NPV

We know AFN is 154,000 and WACC is 19.28

Balance Sheet Assets: Liabilities: Current Assets $995,000 Accounts Payable Notes Payable Other Current Liabilities $300,000 $700,000 $195,000 Fixed Assets $3,000,000 Bonds Payable $1,200,000 Total Liabilities: $2,395,000 Equity $1,600,000 Total Assets: $3,995,000 Total Liabilities & Equity: $3,995,000 Current Market Information: 700 Bonds - $1,000, 20 years, 10% stated rate, issued 8 years ago - currently selling at 0.97 500 Bonds - $1,000, 10 years, 15% stated rate, issued 3 years ago - currently selling at 1.05 100,000 shares of common stock - currently selling for $21.00 per share Financial Analysis: B= 1.15, RM = 22%, Rrf=2.5% Tax Rate = 40% Lender Requirements: Funds will only be distributed in even amounts of $50,000. (50,000, 100,000, 150,000, etc.) If AFN >$200,000 then the Pre-tax Cost of debt will be 15%; otherwise, it will be 18%. Term: 5 years Outlay: $500,000 for Equipment, depreciable over 5 years, salvage value $30,000 $200,000 lost opportunity with an existing vendor $100,000 required NWC recoverable in Year 5. In the first year, sales will increase $1,400,000. Sales are currently $14,000,000. The current profit margin is 20% and the payout ratio is 30%. After Year 1, it is likely that sales will grow 8% per year, and Cost of Goods Sold will grow by 2% per year. The company will need to borrow any funds identified through AFN analysis. Best Case: After Year 1, sales will increase 10% per year. The assumption regarding Cost of Goods Sold would remain as stated above. Worst Case: After Year 1, sales would decrease 3% per year and Cost of Goods Sold would increase 1% per year