down when it is learned that being fit is unhealthy). The elliptical trainers woud set for 51,500 sach and have arvariable cost of 5750 each. The annual freed coats associated with. production would be 51,300,000. In addition, there would be a $4,000,000 inelal expendina ausociated with the porchane of raw production equipment It is assumed that this initial exponditure will be deprociated vehg the simplified straight line method down to zee over 5 years. Thi. profoct will also repuire at oce time initlal investment of 51,200,000 in net working capital associated with inventory, and that wooking capital investment wil be recovered when the propect is shos down. Finaly, ansurne that the firm's marginal tax rate is 33 . percent a. What is the intial outlay associated with this peoject? b. What are the annual free cash flows assoclated with this project for years 1 through 4 ? c. What bs the terminal cath flow in year 5 (that b, what is the free cash flow in year 5 plus any additional cash fows associated with the lormenation of the project?? 4. What is the projects NPV glven a required rode of return of tt percent? a. What o the initial buthy associated with this project? [Round to the nowarest dollar.] b. What are the annual free cash flems assoclated with this pioject for years t throuph 4 (nole thar the cash fows for years 1 through 4 are equang. (Rcund to the neareut dollar.) (Round to the ne arest dofer) down when it is learned that being fit is unhealthy). The elliptical trainers woud set for 51,500 sach and have arvariable cost of 5750 each. The annual freed coats associated with. production would be 51,300,000. In addition, there would be a $4,000,000 inelal expendina ausociated with the porchane of raw production equipment It is assumed that this initial exponditure will be deprociated vehg the simplified straight line method down to zee over 5 years. Thi. profoct will also repuire at oce time initlal investment of 51,200,000 in net working capital associated with inventory, and that wooking capital investment wil be recovered when the propect is shos down. Finaly, ansurne that the firm's marginal tax rate is 33 . percent a. What is the intial outlay associated with this peoject? b. What are the annual free cash flows assoclated with this project for years 1 through 4 ? c. What bs the terminal cath flow in year 5 (that b, what is the free cash flow in year 5 plus any additional cash fows associated with the lormenation of the project?? 4. What is the projects NPV glven a required rode of return of tt percent? a. What o the initial buthy associated with this project? [Round to the nowarest dollar.] b. What are the annual free cash flems assoclated with this pioject for years t throuph 4 (nole thar the cash fows for years 1 through 4 are equang. (Rcund to the neareut dollar.) (Round to the ne arest dofer)
