Consider the following project being evaluated by your company:

-Intial cost of asset 100,000 will require 15,000 transportation and installation cost

-Will be depreciated S/L over 4 years to a 20,000 salvage

-Market value for the asset at end of 5 years is expected to be 10,000

-Net Investment in NWC in year 0 ( at intial period) of 30,000

-Projects economic life 5 years

-Incremental sales, first year. expected to be generated by the project 150,000

-Annual cost of goods sold 40% of sales

-Sales growth 3%

-Marginal tax rate 34%

-Cost of Capital 10%

1) Calculate the project cash outflow in year 0 ( initial outlay)

2) Calculate annual operating cashflows for years 1-5 ((OCF))

3) Calculate the projects terminal cashflow for year 5 (TCF)

4) Calculate the projects NPV, IRR 5) Using excel data table perform a sensitivity analysis of annual sales on NPV for the project ( start with sales of 120,000 incrementing it by 10,000 to 180,000)