I have been struggling with ghe problem and need some help please.
S 4. Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of $4,300,000 and will be depreciated using a five-year MACRS life. The sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as follows: Year one: 260 Year four: 350 Year two: 270 Year five: 330 Year three: 330 If the sales price is $29,000 per car, variable costs are $18,000 per car, and fixed costs are $1,400,000 annually, what is the annual operating cash flow if the tax rate is 30%? The equipment is sold for salvage for $500,000 at the end of year five. Net working capital increases by S600.000 at the beginning of the project (year ) and is reduced back to its original level in the final year. Find the internal rate of return for the project using the incremental cash flows. First, what is the annual operating cash flow of the project for year 1? (Round to the nearest dollar.) What is the annual operating cash flow of the project for year 2? (Round to the nearest dollar.) What is the annual operating cash flow of the project for year 3? (Round to the nearest dollar.) What is the annual operating cash flow of the project for year 4? (Round to the nearest dollar.) What is the annual operating cash flow of the project for year 5? (Round to the nearest dollar.) Next, what is the after-tax cash flow of the equipment at disposal? (Round to the nearest dollar) Then, what is the incremental cash flow of the project in year 0? $ (Round to the nearest dollar.) What is the incremental cash flow of the project in year 1? $ (Round to the nearest dollar.) What is the incremental cash flow of the project in year 2? (Round to the nearest dollar) What is the incremental cash flow of the project in year 3? (Round to the nearest dollar.) $ $ $ What is the incremental cash flow of the project in year 4? $ (Round to the nearest dollar.) What is the incremental cash flow of the project in year 5? $ (Round to the nearest dollar.) So, what is the IRR of the project? % (Round to two decimal places.) 1: Data Table MACRS Fixed Annual Expense Percentages by Recovery Class Click on this icon to download the data from this table Year 1 2 3 4 5 3-Year 33.33% 44.45% 14.81% 7.41% 5-Year 20.00% 32.00% 19.20% 11.52% 11.52% 5.76% 7-Year 14.29% 24.49% 17.49% 12.49% 8.93% 8.93% 8.93% 4.45% Vooh 10-Year 10.00% 18.00% 14.40% 11.52% 9.22% 7.37% 6.55% 6.55% 6.55% 6.55% 3.28% 8 9 10 11