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Madetaylor Inc. manufactures financial calculators. The company is deciding whether to introduce a new calculator. This calculator will sell for $ 1 4 0 .

Madetaylor Inc. manufactures financial calculators. The company is deciding whether to introduce a new calculator. This calculator will sell for $140. The company feels that sales will be 18,000,25,000,24,000,24,000, and 22,000 units annually for five years. Variable costs will be 20% of sales, and fixed costs are $500,000 annually. The firm hired a marketing team to analyze the product's viability, and the marketing analysis cost $500,000. The company plans to manufacture and store the calculators in a vacant warehouse. Based on a recent appraisal, the warehouse and the property are worth $4 million after tax. If the company does not sell the property today, it will sell it five years from today at the currently appraised value. This project will require an injection of net working capital at the onset of the project, $850,000. The firm recovers the net working capital at the end of the project. The firm must purchase equipment for $6,000,000 to produce the new calculators. The equipment has a 5-year life and is depreciated using the MACRS method (20%,32%,19.2%,11.52%,11.52%). At the end of the project, the anticipated salvage value is 0. Surprisingly the firm can sell the machine at the end of the project for $1,000,000. The firm requires a 7% return on its investment and has a tax rate of 21%.
Calculate the sunk cost of the project. (Enter a positive value and round to the nearest dollar)
Calculate the opportunity cost of the project. (Enter a positive value and round to the nearest dollar)
Calculate the net working capital injection at the beginning of the project. (Enter a positive value and round to the nearest dollar)
Calculate the depreciation expense at the end of year 2.(Round to two decimals)
Calculate the book value of the machine at the end of year 5.(round to two decimals)
Calculate the after-tax salvage value at the end of year 6.(Round to two decimals)
Calculate the operating cash flows at the end of year 1.(Round to two decimals)
Calculate the initial cash outflow (e.g. the time 0 cash flow).(Enter a negative value and round to two decimals)
Calculate the cash flow from assets at the end of year 5.(Round to two decimals)
Calculate the net present value for the project. (Round to 2 decimals)

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