CTU FINC615 IP4 calculate cash flows years 1 thorough 5

• Initial investment outlay of $30 million, consisting of $25 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year
• Project and equipment life: 5 years
• Sales: $25 million per year for five years
• Assume gross margin of 60% (exclusive of depreciation)
• Depreciation: Straight-line for tax purposes
• Selling, general, and administrative expenses: 10% of sales
• Taxrate:35%
• WACC 10%