Milwaukee Manufacturing is analyzing a project proposal with the information below:

A sales price of $$80$ per unit, plus or minus $$5$ per unit.

Sales of $8,000$ units, plus or minus $20\%.$

Variable cost of $$11$ per unit.

Fixed costs to be $$300,000$ per year, plus or minus $$20,000.$

Depreciation expense is $$68,000$ per year over the $5-$year useful life of the fixed assets.

Tax rate of $40$ percent.

$(10$ points$)$ Based on the information above determine the best case operating cash flows $($OCF$)$ over the

project's expected life. $($Be sure to label all elements.$)$

The

st

$(5$ points$),$ Milwaukee Manufacturing would need to invest $$340,00$ in fixed assets to start the project. There

is no expected salvage value on the fixed assets. There is no new investment in net working capital.

Determine the best case NPV if the cost of capital is $10\%.$