Milestone Three: Capital Budgeting Data (please fill in YELLOW cells)
				WACC	8%			Capital Budgeting Example Set-up				ACCEPT
								Initial investment $65,000,000				REJECT
								Straight-line Depreciation of 20%
	Initial Outlay	CF1	CF2	CF3	CF4	CF5		Income Tax @35%
	$65,000,000							WACC of 8% approximately. (HD WACC was about 8.83%)
Cash Flows (Sales)		$50,000,000	$45,000,000	$65,500,000	$55,000,000	$25,000,000		Cash Flow (which in this case are Sales Revenues) are as follows:
- Operating Costs (excluding Depreciation)		$25,500,000	$25,500,000	$25,500,000	$25,500,000	$25,500,000		CF1: $50,000,000
- Depreciation Rate of 20%		13,000,000	13,000,000	13,000,000	13,000,000	13,000,000		CF2: $45,000,000
Operating Income (EBIT)		11,500,000	6,500,000	27,000,000	16,500,000	(13,500,000)		CF3: $65,500,000
- Income Tax (Rate 35%)		4,025,000	2,275,000	9,450,000	5,775,000	(4,725,000)		CF4: $55,000,000
After-Tax EBIT		7,475,000	4,225,000	17,550,000	10,725,000	(8,775,000)		CF5: $25,000,000
+ Depreciation		13,000,000	13,000,000	13,000,000	13,000,000	13,000,000		Operating Costs
Cash Flows	($65,000,000)	20,475,000	17,225,000	30,550,000	23,725,000	4,225,000		CF1: $25,500,000
								CF2: $25,500,000
			Select from drop down:					CF3: $25,500,000
	NPV	$13,291,616.74						CF4: $25,500,000
								CF5: $25,500,000
	IRR	16.10%
								WACC- why do we use WACC rate for new projects? If the project doesnt earn more percent than WACC, the corporation should abandon the project and invest money elsewhere.
Based on the spreadsheet below Should the NPV or IRR be accepted or rejected? Why?
								Initial Investment - always negative. Corporation has to invest money ("lose" it till they recover it via sales) in order to gain future benefit.