Smith Steel Works is deciding on a new project. Use the following information for the project evaluation and analysis:

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Smith Steel Works 2020 Income Statement Smith Steel Works Common Stock Data 2020 Current Price per share Shares Outstanding Last Dividend per share Earnings per share $ Expected dividend growth $24.00 100,000 1.5 3.00 10.00% Net Sales Cost of Goods Sold Depreciation EBIT Interest Paid Taxable income Taxes (40% MTR) Net Income $3,000,000 $2,000,000 $300,000 $700,000 $200,000 $500,000 $200,000 $300,000 2000 Bond Data Bonds Outstanding Term to maturity (years) Par value per bond Annual Coupon rate Payment frequency Market price per bond Dividends Paid $150,000 8 $1,000.00 10.00% semi-annual $1,200.00 Smith Steel Works 2019 and 2020 Balance Sheet Cash Accounts Receivable Assets 2019 $160,000 $400,000 $320,000 $880,000 2020 $190,000 $450,000 $360,000 $1,000,000 Liabilities and Owner's Equity 2019 Accounts Payable $310,000 Notes Payable $220,000 Current Liabilities $530,000 2020 $350,000 $250,000 $600,000 Inventory Current Assets Long Term Debt Total Liabilities $1,800,000 $2,330,000 $2,000,000 $2,600,000 Net Fixed Assets $2,700,000 $3,000,000 Common Stock Retained Earnings Total Owner's Equity $1,000,000 $250,000 $1,250,000 $1,000,000 $400,000 $1,400,000 Total Assets $3,580,000 $4,000,000 Total Liab. & OE $3,580,000 $4,000,000 Industry Data 2020: ROE = PM XTAT X EM ROE = 10% x 1 x 1.529 = 15.29% Inventory Period = 45 Accounts Receivable Period = 60 Payables Period = 60 Smith Steel Works is deciding on a new project. Use the following information for the project evaluation and analysis: The initial costs are $1,500,000 for fixed assets. The fied assets will be depreciated straight line to a zero book value over the 3 year life of the project. The fixed assets have an estimated salvage value of $300,000 at the end of the project. The project also requires an additional $300,000 for net working capital. All of the net working capital will be recouped at the end of the 3 years. - The project is expected to generate sales of $2,600,000 (2,600 units at a sales price of $1,000/unit), incur variable cost of $550 per unit and fixed costs of $500,000 per year. The firm's marginal tax rate is 40 percent. What is the Operating Cash Flow for each year of the project? OCF = (Sales (total variable and fixed costs)) x (1 T) + Depreciation x T What is the after-tax salvage value at the end of this project? What are the Cash Flows from Assets each year for this project? 0 1 2 3 Year OCF ANWC NCS CFFA