Sandhill, Inc., is considering investing in a new production line for eye drops. Other than investing in the equipment, the company needs to increase its cash and cash equivalents by $10,000, increase the level of inventory by $23,000, increase accounts receivable by $25,000, and increase accounts payable by $5,000 at the beginning of the project. Sandhill will recover these changes in working capital at the end of the project 10 years later. Assume the appropriate discount rate is 8 percent. What are the present values of the relevant investment cash flows?

Given the soaring price of gasoline, Ford is considering introducing a new production line of gas-electric hybrid sedans. The expected annual unit sales of the hybrid cars is 22,000; the price is $25,000 per car. Variable costs of production are $10,000 per car. The fixed overhead including salary of top executives is $80 million per year. However, the introduction of the hybrid sedan will decrease Fords sales of regular sedans by 8,000 cars per year; the regular sedans have a unit price of $20,000, a unit variable cost of $12,000, and fixed costs of $250,000 per year. Depreciation costs of the production plant are $48,000 per year. The marginal tax rate is 40 percent. What is the incremental annual cash flow from operations?

Given the soaring price of gasoline, Ford is considering introducing a new production line of gas-electric hybrid sedans. The expected annual unit sales of the hybrid cars is 22,000; the price is $25,000 per car. Variable costs of production are $10,000 per car. The fixed overhead including salary of top executives is $80 million per year. However, the introduction of the hybrid sedan will decrease Fords sales of regular sedans by 8,000 cars per year; the regular sedans have a unit price of $20,000, a unit variable cost of $12,000, and fixed costs of $250,000 per year. Depreciation costs of the production plant are $48,000 per year. The marginal tax rate is 40 percent. What is the incremental annual cash flow from operations?