U. JJ93,066.67 Problem Solving (35*2=70 points) 1. You are working on a bid to build THREE city parks ay project requires the purchase of $180,000 of equip line depreciation to a zero book value over the three-year at the end of the project for $115,000. You will als capital for the duration of the project. The fixed costs de 148,000 per park. Your required rate of return is 14 percent and your tax rate percent. HREE city parks a year for the next three years. This nase of $180,000 of equipment that will be depreciated using straight- r the three-year project life. The equipment can be sold oject for $115,000. You will also need to invest $18,000 in net working ation of the project. The fixed costs will be $37,000 a year and the variable Please show your detailed work so that the minimal amount you should bid per park is $177,649.25 Do not round during intermediate steps. Make sure your work shows the answers to the following questions. 1. What is the depreciation every year? 2. What is the after-tax salvage value of the equipment at the end of the project? 3. What is the change in net working capital at the beginning and the end of the project? - 18 What is the cash flow from assets (CFFA) at each time point? 12 5. What is the estimated operating cash flow (OCF) the project must generate to make NPV equal to 0? Assume you submit the minimum price at which you are willing to build the parks and your bid is accepted. a. The NPV of the project is b. The IRR of the project is C c. The P.I. of the project is 2 d. You financially break even by producing city parks. U. JJ93,066.67 Problem Solving (35*2=70 points) 1. You are working on a bid to build THREE city parks ay project requires the purchase of $180,000 of equip line depreciation to a zero book value over the three-year at the end of the project for $115,000. You will als capital for the duration of the project. The fixed costs de 148,000 per park. Your required rate of return is 14 percent and your tax rate percent. HREE city parks a year for the next three years. This nase of $180,000 of equipment that will be depreciated using straight- r the three-year project life. The equipment can be sold oject for $115,000. You will also need to invest $18,000 in net working ation of the project. The fixed costs will be $37,000 a year and the variable Please show your detailed work so that the minimal amount you should bid per park is $177,649.25 Do not round during intermediate steps. Make sure your work shows the answers to the following questions. 1. What is the depreciation every year? 2. What is the after-tax salvage value of the equipment at the end of the project? 3. What is the change in net working capital at the beginning and the end of the project? - 18 What is the cash flow from assets (CFFA) at each time point? 12 5. What is the estimated operating cash flow (OCF) the project must generate to make NPV equal to 0? Assume you submit the minimum price at which you are willing to build the parks and your bid is accepted. a. The NPV of the project is b. The IRR of the project is C c. The P.I. of the project is 2 d. You financially break even by producing city parks