Please answer CF 1-4.

$ 200,000 10.3% $ (120,000) 1) Life Period of the Equipment = 4 years 2) New equipment cost $ 3) Equipment ship & install cost 4) Related start up cost 5) Inventory increase $ 6) Accounts Payable increase $ 7) Equip. Salvage Value Estimated $ End of Year (fully depreciated) 8) Sales for first year (1) 243,000 9) Sales increase per year (35,000) 10) Operating cost: (8,000) (60 Percent of Sales) -60% 25,000 11) Depreciation (Straight Line)/YR 5,000 12) Tax rate 15,000 13) Cost of Capital (WACC) $ 50,000 35% 9% ESTIMATING Initial Outlay (Cash Flow, CFO, T= 0) YEAR CFO CE1 CF1 CF2 CF3 CF4 Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Inventory Inc.- Acct. Payable Inc. 243,000 (35,000) (8,000) 200,000 $ $ (20,000) $ - $ Total Initial Outlay $ 180,000 $ 243,322 $ 268,384 Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income (LOSS) TAX SHIELD DUE TO LOSS Add back Depreciation $ 200,000 $220,600 $ (120,000) $ 50,000 $ 130,000 $ (45,500) $ 84,500 $ (50,000) Total Operating Cash Flow $ 34,500 Terminal (END of 4th YEAR) 1) Release of Working Capital 2) Salvage value (after tax) Total