Tools View Fin 301 Test#1 Opt ROTECTED VIEW Be careful-files from the Internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View Fin 301 Test #1 #1 (25 points) A firm is considering making an investment of $1M. Therefore, the cash flow at time 0 is - SIM. For each of the next 3 years the firm expects EBIT to be $375,000, depreciation is $100,000, and taxes are $75,000. a. Find the operating cash flows for the firm for each of the three years (7 points) b. Using an interest rte of 10% per year, find the present value of the future cash flows. (12 points) c. Compare the present value of the cash flows to the investment cost of SIM. Given the objective of the firm, should the SIM investment be made? (6 points) #2 (25 points) The interest rte s 10% compounded semi-annually a. Find the present value and future value of these cash flows, (12 points