Please show work

The Madison County Journal Constitution a daily newspaper company) is considering introducing a new monthly magazine. The company anticipates that it will cost $20 million in initial cost to create and produce this magazine, and that it can depreciate this cost straight line to zero over the next 4 years. The equipment will be sold for S3 million at the end of 4 years. The company expects to price the magazine at an average of S2.50 an issue and also expects an average advertising revenue of S1.50 per issue sold. The printing and production costs are expected to be S2 per issue. The magazine will be produced by the existing staff of the newspaper resulting in an increase in actual payroll cost by 15% from its current level of $30 million. In addition, the company expects an additional working capital investment equal to 10% of first year revenues at the start of the project. The working capital investment will be recovered at the end of the project. The company's cost of capital is 12% and the marginal tax rate is 30% QUESTION 1A. TEMPLATE Initial cost Salvage Value Depreciation life (straight line) Unit Price per issue Advertising Revenue per issue Printing and Production Costs per issue Current payroll cost % increase in payroll cost of copies sold per year Annual payroll (incremental) Working Capital of Year 1 sales Tax rate Cost of Capital Initial Outlay-Year O Equipment Cost Working Capital Investment Net Investment in Year O YEAR 4 Revenues - Printing & production - Payroll costs - Depreciation EBIT Taxes EBIT (1-0)--NOPAT + Depreciation Operating CF to firm s TERMINAL CASHFLOWS (Salvage Value of Equipment) Taxes on Salvage Value Salvage Value after Takes Recovery of Working Capital Net Terminal Cashflow Free cash flow to Firm (NET CASHFLOW) NPV DECISION????? Question 1B. Identify what you are trying to do and show your steps to receive any partial credit. I. What is the minimum price the company matchar to financially re-ren? 10 points, The Madison County Journal Constitution a daily newspaper company) is considering introducing a new monthly magazine. The company anticipates that it will cost $20 million in initial cost to create and produce this magazine, and that it can depreciate this cost straight line to zero over the next 4 years. The equipment will be sold for S3 million at the end of 4 years. The company expects to price the magazine at an average of S2.50 an issue and also expects an average advertising revenue of S1.50 per issue sold. The printing and production costs are expected to be S2 per issue. The magazine will be produced by the existing staff of the newspaper resulting in an increase in actual payroll cost by 15% from its current level of $30 million. In addition, the company expects an additional working capital investment equal to 10% of first year revenues at the start of the project. The working capital investment will be recovered at the end of the project. The company's cost of capital is 12% and the marginal tax rate is 30% QUESTION 1A. TEMPLATE Initial cost Salvage Value Depreciation life (straight line) Unit Price per issue Advertising Revenue per issue Printing and Production Costs per issue Current payroll cost % increase in payroll cost of copies sold per year Annual payroll (incremental) Working Capital of Year 1 sales Tax rate Cost of Capital Initial Outlay-Year O Equipment Cost Working Capital Investment Net Investment in Year O YEAR 4 Revenues - Printing & production - Payroll costs - Depreciation EBIT Taxes EBIT (1-0)--NOPAT + Depreciation Operating CF to firm s TERMINAL CASHFLOWS (Salvage Value of Equipment) Taxes on Salvage Value Salvage Value after Takes Recovery of Working Capital Net Terminal Cashflow Free cash flow to Firm (NET CASHFLOW) NPV DECISION????? Question 1B. Identify what you are trying to do and show your steps to receive any partial credit. I. What is the minimum price the company matchar to financially re-ren? 10 points