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Hello, I have the following case and need to 6 years free cash flow, PV Terminal Value in Year 6 and Beyond and NPV of

Hello, I have the following case and need to 6 years free cash flow, PV Terminal Value in Year 6 and Beyond and NPV of the project. Can you please check my answers?

Canyon Buff Corp. has developed a new construction chemical that greatly improves the durability and weatherability of cement-based materials. After spending $500 on the research of the potential market for the new chemical, Canyon Buff is considering a project that requires an initial investment of $9,000 in manufacturing equipment. The equipment must be purchased before the chemical production can begin. For tax purposes, the equipment is subject to a 5-year straight-line depreciation schedule, with a projected zero salvage value. For simplicity, however, we will continue to assume that the asset can actually be used out into the indefinite future (i.e., the actual useful life is effectively infinite). Canyon Buff anticipates that the sales will be $30,000 in the first year (Year 1). They expect that sales will initially grow at an annual rate of 6% until the end of sixth year. After that, the sales will grow at the estimated 2% annual rate of inflation in perpetuity. The cost of goods sold is estimated to be 72% of sales. The accounting department also estimates that at introduction in Year 0, the new product's required initial net working capital will be $6,000. In future years accounts receivable are expected to be 15% of the next year sales, inventory is expected to be 20% of the next year's cost of goods sold and accounts payable are expected to be 15% of the next year's cost of goods sold. The selling, general and administrative expense is estimated to be $6,000 per year, but $1,000 of this amount is the overhead expense that will be incurred even if the project is not accepted. The market research to support the product was completed last month at a cost of $500 to be paid by the end of next year. The annual interest expense tied to the project is $1,000. Canyon Buff has a cost of capital of 20% and faces a marginal tax rate of 30% and an average tax rate is 20%.

According to my calcs: PV(terminal value that captures the value of future free cash flows in Year 6 and beyond) = 8,477

Six-year projections for free cash flows - 5,676

NPV - (3,924)

Can you please confirm that I have correct answers?

Thank you!

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