Miglietti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of

35,000,

with an annual growth rate of

4.00%

over the next ten years. The sales price per unit will start at

$41.00

and will grow at

2.00%

per year. The production costs are expected to be

55%

of the current year's sales price. The manufacturing equipment to aid this project will have a total cost (including installation) of

$2,400,000.

It will be depreciated using MACRS,

LOADING...

,

and has a seven-year MACRS life classification. Fixed costs will be

$330,000

per year. Miglietti Restaurants has a tax rate of

35%.

What is the operating cash flow for this project over these ten years? Find the NPV of the project for Miglietti Restaurants if the manufacturing equipment can be sold for

$150,000

at the end of the ten-year project and the cost of capital for this project is

8%.

Year	3-Year	5-Year	7-Year	10-Year
1	33.33%	20.00%	14.29%	10.00%
2	44.45%	32.00%	24.49%	18.00%
3	14.81%	19.20%	17.49%	14.40%
4	7.41%	11.52%	12.49%	11.52%
5		11.52%	8.93%	9.22%
6		5.76%	8.93%	7.37%
7			8.93%	6.55%
8			4.45%	6.55%
9				6.55%
10				6.55%
11				3.28%