The Samsung marketing department has estimated demand for a new device and expects to sell $3$ million units at a price of $$250$ each.

It costs $$50$ million each year to run the factory, independent of the level of production. Labor and components for each device add up to $$150$ per unit. Samsung's marginal tax rate is $0\mathrm{.}34,$ and the annual depreciation attributable to the project is $$40$ million.

What is EBIT in each year of operation $($in $ million$)?$

What is the operating cash flow in each year of operation $($in $ million$)?$

Better Tires Corp. is planning to buy a new tire making machine for $$70,000$ that would save it $$80,000$ per year in production costs. The savings would be constant over the project's $3-$year life. The machine is to be linearly depreciated to zero and will have no resale value after $3$ years.

The appropriate cost of capital for this project is $11\%$ and the tax rate is $21\%.$

What is the cash flow from assets in each year of operation $($years $1$ to $3)?$

What is the NPV of this project?