Please Answer Question 3/4

1. Prepare forecasted balance sheet and income statement for Flash memory Inc for years 2010, 2011, and 2012 based on the information provided in the case. Please use the notes payable as the plug item. 2. Estimate the new investment's future incremental cash flows (sales, cost of goods sold, SG\&A expenses, the launch expense in 2011, depreciation, taxes, working capital, etc.) over its five-year life cycle. You can assume the year 2010 to be year 0 . (Except for changes in net working capital, which must be made before the start of each year, you should assume that all cash flows occur at the end of the year in question.) 3. Estimate the firm's weighted average cost of capital (WACC). 4. Using the WACC estimated above as a discount rate, what is the new investment's net present value (NPV)? What is the internal rate of return (IRR)? 5. Should Flash Memory invest in the new project based on its economic merits? 6. What is the possible effect of the adoption of this new project on the level of notes payable in the next several years? Should Flash Memory still invest in the new project given this effect