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Please fill in empty cells Inputs Equipment cost Net WC/Sales First year sales (in units) Sales price per unit Variable cost per unit Nonvariable costs

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Inputs Equipment cost Net WC/Sales First year sales (in units) Sales price per unit Variable cost per unit Nonvariable costs $5,000 10.00% 500 $24.00 $17.50 $500 Market value of equipment at Year 4 Tax rate WACC Inflation $250 40.00% 11.00% 3.00% Depreciation and Amortization Schedule Year Years 2 Accum. Dep. Initial Cost 3 4 Equipment Depreciation Rate Equipment Depreciation Amount Ending Bk Value 20.0% $1,000 32.0% $1,600 19.0% $950 12.0% $600 $4,150 Equipment $250.00 Net Salvage Values, in Year 4 Estimated Market value in Year 4 Book Value in Year 4 Expected Gain or Loss Taxes paid or tax credit Net cash flow from salvage Projected Net Cash Flows 0 1 2 3 4 Initial Outflow Equipment ($5,000) Operating Cash Flows Units sold Sales price Variable costs 500 $24.00 $17.50 500 $24.72 $18.03 500 $25.46 $18.57 500 $26.23 $19.12 Sales revenue Variable costs Nonvariable operating costs Depreciation (equipment) Oper. income before taxes (EBIT) Taxes on operating income (40%) After-tax operating income Add back depreciation Operating cash flow Required level of net working capital Required investment in NWC Terminal Year Cash Flow Net salvage value Net Cash Flows NPV IRR MIRR

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