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Period 0 1 2 3 4 EBIT 35,000 45,000 60,000 75,000 The above table illustrates earnings before interest and taxes for a capital investment project.

Period 0 1 2 3 4
EBIT 35,000 45,000 60,000 75,000

The above table illustrates earnings before interest and taxes for a capital investment project. Additional information for this project: initial cost of the investment = $250,000 change in net working capital = $10,000 (and 50% of this is recoverable at end of the project) tax rate = 31.0% WACC = 15.0% depreciation = straight line over five years projected cash flow from salvage = $136,250 What is net incremental cash flow for Year 1?

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