Haiku, Inc is considering a new project. The details are below.

	Vanessa
Cost of new project	$84,000
Installation costs	$12,000
Estimated unit sales in year 1	200
Estimated sales price in year 1	$280
Variable cost per unit	55%
Fixed cost year 1	$5,000
Initial working capital needs	$4,000
Working Capital Needs	6% of sales each year
Depreciation Method	10 years straight-line method, no salvage value
Tax Rate	37%
discount	14%
Beta	0.95
Risk Free Rate	3%
Risk Premium	5%
Debt Ratio	35%
Cost of Borrowing	9%

Calculate and fill in the chart below with the equations and determine if the project should be accepted:

Operating Cash Flow
Year	?
Units Sold	?
Sale Price	?
Sales Revenue	?
Less: Variable Costs	?
Less: Fixed Costs	?
Equals: EBIT	?
Less: Taxes @40%	?
Plus: Depreciation	?
Equals: Operating Cash Flow	?
Change in Net Working Capital
Initial Working Capital Requirement	?
Net Working Capital Needs	?
Liquidation of Working Capital	?
Change in Working Capital	?
Free Cash Flow
Operating Cash Flow	?
Minus: Change in Net Working Capital	?
Minus: Change in Capital Spending	?
Free Cash Flow	?