Capital Expenditure@ t-0 (Depreciable basis): $525,000 Inventories will rise by 60,000. Payables will rise by $17,000 MACRS 3-year class property (depreciation: 33%, 45%, 15%, 7%) Economic life: 3 years Inflation-0% . Salvage value: $129,000 Project sales revenues: 200,000 units/yr, price-$2.50 Variable operating costs: 55% of sales revenue . . Fixed operating costs: $25,000/ Tax rate-21%, WACC-12% 1. Calculate OCF in Year 0 2. Calculate the CFFA in Year 0 3. Calculate OCF in Year 1 4. Calculate OCF in Year 2 5. Calculate OCF in Year 3 6. Calculate Year 3 CFFA 7. Calculate Project NPV 8. Calculate Project IRR. Scenario Analysis: Continuing from #8, assume estimates for sales revenue, variable operating cost percentage, and the firm's tax rate are accurate within +/- 10%, (note that if the expected tax rate is 30%. the worst-case tax rate would be 30%(1+.1)-33%, not 30+10%-40%). 9. Calculate Year 1 OCF under the worst-case scenario. (higher taxes & variable operating costs, lower sales revenue.) 10. Calculate Year 1 OCF under the best-case scenario Breakeven Analysis (use the base case data, not the best/worst case scenarios) 11. Calculate the Accounting Breakeven sales quantity for Year 3 12. Calculate the Cash Breakeven sales quantity for Year 3 13. Calculate the Degree of Operating Leverage for Year 3. 14. What is the Average Cost per unit produced in Year 3