Lets Do This Again Sports is building a new warehouse facility and you are asked to complete a

five year model using the following assumptions: Hint: Yr $0=$$$ outflows, Yr$1-4=$OCF$+$

Change NWC$,$ Yr$5=$ OCF $+$ Change NWC $(+$ if NWC is recoverable$)+$ ATSV

Assumptions

Unit Sales year $1$

$2,500$

Average sales price

$725$

Unit sales growth each year

Yearly working cap need as a $\%$ sales

$30\mathrm{.}0\%$

Tax rate

$10\mathrm{.}0\%$

Depreciation to $0$ straight line # yrs

$21\mathrm{.}0\%$

Year $0$ warehouse cost

$7$

Year $0$ working capital $-$ get all of it back

at the end of the project

Annual operating costs as a $\%$ revs

$$150,000$

Required return

$$6,500,000$

Sell warehouse after $5$ yrs $($SV$)$

$3,800,000$

What is the Total Cash Flows in Year $1?$

What is the Operating Cash Flow in Year $2?$

What is the Operating Cash Flow in Year $4?$

What is the After Tax Salvage Value?

What is the NPV of the project? Should you accept it $($Yes$/$No$)$ and why?

What is the IRR of the project?