Consider the following case study and answer the questions.

1. You are the financial analyst for Apple which is evaluating investing in a project to develop a new Iphone15X.
2. The project will last for 5 years and require an initial capital outlay on new machinery of $100 million (paid today).
3. The machinery will be depreciated to $0 book value over the 5 years and can be sold in year 5 for $20 million.
4. The revenues from the sale of the new Iphone15X will be $40 million per year for the next five years (starting at the end of year 1).
5. The revenue for Apples existing Iphone12 product is expected drop by $5 million per year for the next five years as a result of the new product.
6. Variable costs will be 15% of the incremental revenues for the next five years.
7. Apples Research and Development department has spent $1 million researching demand for the new product and found that the project is feasible.
8. The project requires $2 million for working capital immediately but it will not require any other working capital investments during its life. This working capital will be recovered in the last year of the project.
9. The project is funded only using ordinary shares which have a required return of 20%.
10. The Apple Board of Directors only approve projects which have a payback of maximum 4 years.
11. The tax rate is 30%

Complete the following table to calculate the free cash flows for this project for every year.

		Year 0	Years 1 to 4	Year 5
	Net Revenue
	Operating Expenses
	Depreciation
	EBIT
	Tax
	NOPAT
	Depreciation
	Cash flow from operations
	Capital Expenditure
	Working Capital
	Salvage Value
	Free Cash Flow (FCF)