golden balls

chase. te Q 14.26. Consider the following project: Project Real Physical Lifespan6 years Cost Gross Output $150 $50 in year 1 $80 in year 2 $90 in year 3 $50 in year 4 $25 in year 5 $0 in year 6 $5/year $5/year 12%/year 40%/year - Input Costs (cash) - Selling Costs (cash) Overall Cost of Capital Corporate Tax Rate (T) Available Financing $50 Debt Capacity Debt Interest Rate 10%/year Accounting Treatment Accounting Life Depreciation Method 3 years Linear Assume customers pay one year after delivery. Construct (the relevant items of) the balance sheet, the income state- ment, and the cash-flow statement. Compute the value of this firm, both from finance principles and from the finan- cial statements. (Please note that this is a time-intensive question-almost a mini-case.)