Please answer a-d

mathal.com 0 Principles of Business Finance Web Spring 2018 Dami Oloyede &1 3/13/18 540 PM Homework: Chapter 12 Homework Score: 0 of 1 pt HWSoom: 0%, 0 of 11p P12-14 (similar to aasson Help Related to Checkpoint 121) (Caloulating project cash flows and NPV) You are considering expanding your product ine that ourrently consists of skateboards to indlude gas-powened skateboards, and you feel you can sel 9,000 of these per year for 10 years (after which time this project is expected to shut down with solar-powered skateboards taking over). The gas skateboards would sell for $130 each with variable costs of $30 for each one produced, and ar,nual fixed oosts associated wit, production ould be $150,000 In addition, e re wo ld be $1.300,000 nitae perdaro associated we the purchase of new produ tion equipment is ass med tat thin! expenditure will be depreciated using the simplified straight line method down to zero over 10 years. The project will also require a one-time initial investment of 580,000 in nel working capital assooiated with Inventory, and his working capital investment will be recovered when the project is shut down. Finally, assume that the fem's marginal tax rate is 35 percent a. What is the initial cash ouday associated with this project? b. What are the annual net cash fows associated with this project for years 1 through 9 c. What is the terminal cash fow in year 10 (that is, what is the free cash fow in year 10 plus any additional cash fows associated with termination of the project)? d. What is the projects NPV given a required rate of return of 12 percent? . The initial cash outlay associsted with this project is (Round to the nearest d) nter your answer in the answer box and then click Check Answer parts