Equipment Book Value* 4, 500, 000 3, 000 , 150 959, 900 3:33 , 450 Depr MACRS 33. 3.3% 44.45% 14 . 81% 7.4190 0. 00% Annual Depreciation 1 , 499 , 850 2, 000 , 250 666 , 450 3:33 , 450 Unit Price 25 Unit Sales 150,000 Year O 1 2 3 47 5 Income Statement Revenue 3 , 750, 000 VC 600, 000 FC 600,000 Depreciation 1 , 499 , 850 EBIT 1 , 050 , 150 Taxes ( 35%/6 ) 367, 553 Net Income 582 , 598 Operating Cash Flow EBIT 1 , 050, 150 Depreciation ( Add ) 1 , 499, 850 Taxes ( 367 , 553) Operating Cash Flow 2 , 182 , 448 Net Working Capital NWC Requirement Total Change in NWC Capital Spending* Initial Outlay Aftertax Salvage Capital Spending Operating Cash Flow 2 , 182 , 448 Change in NWC Capital Spending Total Project Cash Flow 2 , 182 , 448 Cumulative Cash Flow 2 , 182 , 448 2 , 182 , 448 2 , 182 , 448 2 , 182 , 448 2, 182 , 448 Discounted CF @ 12% 1 , 948 , 614 Discount rate* 12% Payback NPV IRR