return. Apply the appropriate decision criteria.

Data table

a$.$ Determine the free cash flows associated with the project.

The FCF in year $0$ is $$,($Round to the nearest dollar.$)$

Cost of new plant and equipment: $$15,000,000$

Shipping and installation costs: $$170,000$

Unit sales:

Sales price per unit:

Variable cost per unit:

Annual fixed costs:

Working$-$capital requirements:

The depreciation method:

$$330/$unit in years $1$ through $4,$$$280/$unit in year $5$

$$160/$unit

$$800,000$

There will be an initial working capital requirement of

$$160,000$ to get production started. For each year, the

total investment in net working capital will be equal to $14$

percent of the dollar value of sales for that year. Thus,

the investment in working capital will increase during

years $1$ through $3,$ then decrease in year $4.$ Finally, all

working capital is liquidated at the termination of the

project at the end of year $5.$

Use the simplified straight$-$line method over $5$ years. It is

assumed that the plant and equipment will have no

salvage value after $5$ years.