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Company A is considering setting up another production line. You have been provided with the following information on this ten year project: . The expansion

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Company A is considering setting up another production line. You have been provided with the following information on this ten year project: . The expansion will require the purchase of machinery costing $50,000,000 right away (t=0). The firm uses straight-line depreciation. The project has an economic life of 10 years and the machinery will have a salvage value of $8,000,000. The book value will decrease to zero at project completion . The firm has already spent $350,000 to train workers to use the new machinery. If the project is accepted, the firm will spend an additional $750,000 in training costs to be paid today and only today (t=0) . Once the production line is running the sales will be $12,000,000 per year, of which $2.000.000 will come from the loss in sales of the firm's existing products, . Once the production line is running, the operating expenses (excluding depreciation) will be $2,000,000 per year. . Because of the project, the firm will need additional net operating working capital of $200,000 at to, which can be liquidated at project completion The firm's bond has a yield to maturity of 8%, its cost of equity is 10%, and its capital structure has 40% debt and 60% equity. - The firm's marginal tax rate is 20%, How much is the initial net cash flow of the project (i.e., CFO)? Keep the - sign for cash outflow. Round to the whole dollar. How much is the project's net operating cash flow in year 1? Keep the - sign if it's a negative cash flow number. Round to the whole dollar. How much is the project's TOTAL cash flow in year 107 (Hint: Consider all relevant cash flows in the last year.) Keep the - sign if it's a negative cash flow number, Round to the whole dollar

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