Explansion Project:

KFUPM is planning to buy a new heavy duty printing machine. You were hired to assist KFUPM on this decision. So you gathered the following information. The new machine has a life of $3$ years.

New Machine:

Life of machine: $3$ years

The cost of the new machine is SAR $1,142$

The machine will increase the gross profit every year by SAR $359$

The market value of the machine when sold at the end of its life is SAR $186$

If replaced, then the net working capital $($NOWC$)$ will increase every year by SAR $22$

KFUPM will recover all investments in working capital at the end of the new machine's life $($after $3$ years$).$

WACC is $8\mathrm{.}61\%$

Tax rate is $40\%$

KFUPM uses straight$-$line Depreciation.

Calculate the follwoing:

$$

$$

$$

Notes:

Use $2$ Decimals

It is advisable to solve the question using Excel or on paper, and then put your relevant answers here:

Depreciable base SAR is

A$1.$ New Machine:

Year$0$

Year$1$

Year$2$

Year$3$

NOPAT $+$ Dep.

A$2.$ Cash Flows from Working Captial $($WC$)$:

Yearo

$(-)$ change in NOWC$*$

Year$1$

$0$

A$3.$ Cash Flows from the Initial Outlay $($IO$)$:

Year$0$

$(-){10}^{**}$

A$4.$ Cash Flows from Terminal Cash Flows $($TCF$)$:

$\backslash$table$[[,x,x,x,$Year$3],[$TCF ${?}^{**},x,x,x,]]$

A$5.$ Free Cash Flows:

Year$0$

Year$1$

Year$2$

Year$3$

FCF

$*$The sum of A$1-$A$4$

D$.$ NPV $=$