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Swirl Pool is considering the introduction of a new line of refrigerators. The freezer on these refrigerators has a special compartment where food can be

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Swirl Pool is considering the introduction of a new line of refrigerators. The freezer on these refrigerators has a special compartment where food can be chilled or frozen in a matter of minutes. A research breakthrough has given Swirl Pool a two-year lead on its competitors, after which competitors are expected to introduce similar models. The project will require an initial investment of $160 million in new machinery that has a life of 4 years. It will be depreciated on a straight-line basis to a zero salvage value. Swirl Pool has a 30% tax rate and a 10% weighted average cost of capital. Below are the sales and cos figures for the new refrigerator. (all figures in millions of dollars) Year 0 Year 1 Year 2 Year 3 Year 4 Sales 500 550 425 450 COGS 280 302 234 250 Selling and General Admin Expense 50 55 41 43 Net Working Capital 120 125 132 118 122 These new types of refrigerators are expected to cannibalize 40% of the sales of SwirlPool's current top-of-the-line refrigerator. Before this project, the current top- of-the-line-refrigerator had been forecast to have sales of $650 million each year for the next four years. The gross profit margin for the line is 10%. What are the after- tax incremental cash flows associated with this (millions of dollars)? Swirl Pool is considering the introduction of a new line of refrigerators. The freezer on these refrigerators has a special compartment where food can be chilled or frozen in a matter of minutes. A research breakthrough has given Swirl Pool a two-year lead on its competitors, after which competitors are expected to introduce similar models. The project will require an initial investment of $160 million in new machinery that has a life of 4 years. It will be depreciated on a straight-line basis to a zero salvage value. Swirl Pool has a 30% tax rate and a 10% weighted average cost of capital. Below are the sales and cos figures for the new refrigerator. (all figures in millions of dollars) Year 0 Year 1 Year 2 Year 3 Year 4 Sales 500 550 425 450 COGS 280 302 234 250 Selling and General Admin Expense 50 55 41 43 Net Working Capital 120 125 132 118 122 These new types of refrigerators are expected to cannibalize 40% of the sales of SwirlPool's current top-of-the-line refrigerator. Before this project, the current top- of-the-line-refrigerator had been forecast to have sales of $650 million each year for the next four years. The gross profit margin for the line is 10%. What are the after- tax incremental cash flows associated with this (millions of dollars)

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