Philips expects to invest $26,000,000 in new/plant equipment. The contract will last for 10 years, at which point it expects its plant equipment to have a salvage value of $12,000,000. They plan to finance this project using 40% debt and 60% equity. Their investment banker advises there are transaction costs of 3.75% on debt and 11.0% on equity. Phillips expects to increase its accounts receivable by $7,500,000, its inventory by $3,000,000, and its accounts payable by $0,000,000. It expects to sell 50,000 units at a price of $315/unit, with variable cost per unit of $200. It expects additional operating costs each year of $550,000. Phillips tax rate is 35%.

1. What is the firms flotation adjusted Initial Capital Expenditure? (round to nearest $100,000)
   1. $28,300,000
   2. $26,400,000
   3. $27,500,000
   4. $29,700,000
2. What is the projected Cash flow at Year 0? (round to nearest $100,000)
3. What is expected Cash flow Year 1-9? (round to nearest $100,000)
4. What is the expected Cash Flow of Year 10? (round to nearest $100,000)
5. What is the projects Net Present Value?
6. What is the projects Internal Rate of Return?
7. What is Phillips Accounting Break-even unit sales level?
8. What is Phillips Cash Break-even unit sales level?