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Please answer for all 5 years. Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The

Please answer for all 5 years.image text in transcribed

Project cash flow and NPV. The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds (1957 replicas). The necessary foundry equipment will cost a total of $3,900,000 and will be depreciated using a five-year MACRS life, The sales manager has an estimate for the sale of the classic Thunderbirds. The annual sales volume will be as follows: Year one: 250 Year two: 280 Year three: 350 Year four: 370 Year five: 310 If the sales price is $27,000 per car, variable costs are $17,000 per car, and fixed costs are $1,200,000 annually, what is the annual operating cash flow if the tax rate is 30%? The equipment is sold for salvage for $500,000 at the end of year five. Net working capital increases by $500,000 at the beginning of the project (year 0) and is reduced back to its original level in the final year. Find the internal rate of return for the project using the incremental cash flows. i Data Table MACRS Fixed Annual Expense Percentages by Recovery Class Click on this icon to download the data from this table Year 1 2 3-Year 33.33% 44.45% 14.81% 7.41% 3 5-Year 20.00% 32.00% 19.20% 11.52% 1.52% 5.76% 4 7-Year 14.29% 24.49% 17.49% 12.49% 8.93% 8.93% 8.93% 4.45% 10-Year 10.00% 18.00% 14.40% 11.52% 9.22% 7.37% 6.55% 6.55% ? 6 7 Clear All Check Answer 8

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