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For a new process, the land was purchased for $10 million. The fixed capital investment, paid at the end of year 0, is $165 million.

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For a new process, the land was purchased for $10 million. The fixed capital investment, paid at the end of year 0, is $165 million. The working capital is $15 million and the salvage value is $15 million. The estimated revenue from years 1 through 10 is $70 million/yr and the estimated cost of manufacturing (without depreciation) over the same time period is $25 million/yr. The interest rate is 14% and the taxation rate is 40%. For part (c) to (e), include sample calculations for year 1, 5, and 10 in the hard-copy version of this assignment to be submitted separately in class. a) (7 marks) Draw a discrete, non-discounted cash flow diagram for this process. b) (5 marks) Calculate the yearly depreciation schedule using the DB method with CCA rate of 50%. Include details of your calculations for all years in the hard-copy. c) (8 marks) Determine the after-tax profit for each year. d) (10 marks) Draw the after-tax cash flow for each year. e) (10 marks) Draw a discrete, discounted (to year 0) cash flow diagram for this process. f) (7 marks) Draw a cumulative, discounted (to year 0) cash flow diagram for this process. g) (2 marks) What is the present value (year 0) of this process? For a new process, the land was purchased for $10 million. The fixed capital investment, paid at the end of year 0, is $165 million. The working capital is $15 million and the salvage value is $15 million. The estimated revenue from years 1 through 10 is $70 million/yr and the estimated cost of manufacturing (without depreciation) over the same time period is $25 million/yr. The interest rate is 14% and the taxation rate is 40%. For part (c) to (e), include sample calculations for year 1, 5, and 10 in the hard-copy version of this assignment to be submitted separately in class. a) (7 marks) Draw a discrete, non-discounted cash flow diagram for this process. b) (5 marks) Calculate the yearly depreciation schedule using the DB method with CCA rate of 50%. Include details of your calculations for all years in the hard-copy. c) (8 marks) Determine the after-tax profit for each year. d) (10 marks) Draw the after-tax cash flow for each year. e) (10 marks) Draw a discrete, discounted (to year 0) cash flow diagram for this process. f) (7 marks) Draw a cumulative, discounted (to year 0) cash flow diagram for this process. g) (2 marks) What is the present value (year 0) of this process

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