Corporate Finance Chapter 9 The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds. The necessary foundry equipment will cost a total of $4,000,000 and will be depreciated using a five-year MACRS life. Projected sales in annual units for the next five years are 300 per If sales price is $27,000 per car, variable costs are $18,000 per car, and fixed costs are $1,200,000 annually, what is the annual operating cash flow if the tax rate is 30%? The equipment is sold for salvage for $500,000 at the end of year five. What is the after tax cash low of the salvage? Net working capital increases by $600,000 at the beginning of the project (Year 0) and is reduced back to its original level in the final year. What is the ntal cash flow of the project? Using a discount rate of 12% for the project, determine whether the project be accepted or rejected with the NPV decision model MACRS(The Modified Accelerated Cost Recovery System) V Year One 0.20 Year Two 0.32 Year Three 0.192 Year Four 0.1152 Mear Five-0.1152 :3.uue o leo aloo 81 Setou ood ) ed 1,2- cosh Def B8LT 76 46 80 512 Seo 120 u6 o 84 ueto 717