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

36,000,

with an annual growth rate of

4.00%

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

$42.00

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

$2,500,000.

It will be depreciated using MACRS,

LOADING...

,

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

$350,000

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

$140,000

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

9%.

Operating cash flow for next 10 years?

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%