Net Working Captial - If the new facility is opened, Terrapin Texts will increase inventory by $2 million and account payable by 1 million at time = 0. The company's net working capital will be recovered at time = 5.

The firm's managers spent 750,000 to do a feasibility study a year and a half ago, the conclusion was that opening a new faulty would be profitable.

The interest expense will increase by $50,000 per year with this project.

The estimated upfront cost of constructing the facility at time = 0 is 10 million.

Land Sale Price - If this project is not done, then the land on which the facility would be built would be sold for $5 million immediately.

Construction Costs - the estimated upfront cost of constructing the facility at time =0 is $10 million.

iFind the Year 0 Incremental Free Cash Flows:

Initial cost $

NWC $

Opportunity Cost $