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Goose Bank's Board of Directors is considering a new investment Financial projections for this project are as follows: Concept / Year 0 1 2 3
| Goose Bank's Board of Directors is considering a new investment | ||||||||||
| Financial projections for this project are as follows: | ||||||||||
| Concept / Year | 0 | 1 | 2 | 3 | 4 | |||||
| Investment | $ 27,400 | |||||||||
| Sales Income | $ 12,900 | $ 14,000 | $ 15,200 | $ 11,200 | ||||||
| Operational Costs | $ 2,700 | $ 2,800 | $ 2,900 | $ 2,100 | ||||||
| Depreciation | $ 6,850 | $ 6,850 | $ 6,850 | $ 6,850 | ||||||
| Net workimg capital Costs | $ 300 | $ 200 | $ 225 | $ 150 | ? | |||||
| Assume that Revenues from sales are in cash as well as the Operational Cash and Taxes. Corporate tax rate is 35%. Total net working capital will be recovered at the end of the project. (i.e. Figures shall be reflected for the following year considering time value of money) | ||||||||||
| a) Calculate Net profit for each year. | ||||||||||
| b) Calculate net cash flows for each year of the investment. | ||||||||||
| c) Consider a 12% rate for discount. What is Project's Net Present Value? | ||||||||||
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