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The project costs for a new plant are given below (all numbers are in $10^6). Land cost = $7.5 Fixed capital investment = $120 ($60

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The project costs for a new plant are given below (all numbers are in $10^6). Land cost = $7.5 Fixed capital investment = $120 ($60 at end of year 1, $39.60 at end of year 2, and $20.40 at end of year 3) Working capital = $35 (at start-up) Start-up at end of year Revenue from sales = $52 Cost of manufacturing (without depreciation) = $18 Tax rate = 40% Depreciation method = Current MACRS over 5 Length of time over which profitability is to be assessed = 10 years after start-up Internal rate of return = 9.5% p.a. For this project, do the following: Draw a cumulative (nondiscounted) after-tax cash flow diagram. From Part (a), calculate the following nondiscounted profitability criteria for the project: cumulative cash position and cumulative cash ratio Payback period Rate of return on investment Draw a cumulative (discounted) after-tax cash flow diagram. From Part (c), calculate the following discounted profitability criteria for the project: Net present value and net present value ratio Discounted payback period Discounted cash flow rate of return (DCFROR) The project costs for a new plant are given below (all numbers are in $10^6). Land cost = $7.5 Fixed capital investment = $120 ($60 at end of year 1, $39.60 at end of year 2, and $20.40 at end of year 3) Working capital = $35 (at start-up) Start-up at end of year Revenue from sales = $52 Cost of manufacturing (without depreciation) = $18 Tax rate = 40% Depreciation method = Current MACRS over 5 Length of time over which profitability is to be assessed = 10 years after start-up Internal rate of return = 9.5% p.a. For this project, do the following: Draw a cumulative (nondiscounted) after-tax cash flow diagram. From Part (a), calculate the following nondiscounted profitability criteria for the project: cumulative cash position and cumulative cash ratio Payback period Rate of return on investment Draw a cumulative (discounted) after-tax cash flow diagram. From Part (c), calculate the following discounted profitability criteria for the project: Net present value and net present value ratio Discounted payback period Discounted cash flow rate of return (DCFROR)

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