Instructions:

1.Compute theNet Working Capital cash flow required by the new production line.

2.Compute the expectedOperating Cash Flow from the production line.

3.Using the above cash flow data, compute the NPV of the project cost using the final estimated cost.You must decide if the company will finance the entire project through debt, or will issue the original amount of Bonds and offer equity financing for the remaining financing needs.Be sure to use the appropriate projected interest payments.

4.Discuss your decision and the results.

Please refer to the Project Requirements for additional data and complete instructions.