Financial Management Name: i. The Movie Place is considering a new investment whose data are shown below. The required equipment has a 3-year tax life and would be fully depreciated by the straight line method over the 3 years, but it would have a positive salvage value at the end of Year 3, when the project would be closed down Also, some new working capital would be required, but it would be recovered at the end of the projects life. Revenues and other operating costs are expected to be constant over the project's 3-year life. What is the project's NPV? WACC 10% Net equipment cost (depreciable basis) Required new working capital Straight line depr'n rate Sales revenues Operating costs excl. depr'n Expected pretax salvage value Tax rate $65,000 $10,000 33.33% $70,000 $25,000 $5,000 35 % Year Yr 1 Yr 0 Yr 2 Yr3 Capital Spending Net Working Capital Operating Cash Flows Yr 1 Yr 2 Yr 0 Yr3 Total Cash Flows NPV