Can use Excel to solve.

Project Cash Flows Homework 1. At a manufacturing facility they are considering the following energy savings improvements, should they be done: Project life Initial cost (also depreciable basis) Tax depreciation method Salvage value Savings Labor and material MAAR (after tax) Income tax rate 3 years 120,000 straight line 60,000/yr 10% 30% Year 1 Income Statement Revenue Expenses Labor + materials Depreciation amount Taxable income Income taxes Net income Cash Flow Statement Operating activities Net income Depreciation Investment activities Investment Salvage Gains tax Net cash flow