Use the following information for the next 10 questions: The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 21 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $26,900 Sales revenue $14,000 $15,600 $17,000 $13,500 Operating costs 3,200 3,250 4,800 3,400 Depreciation 6,725 6,725 6,725 6,725 Additional Networking capital spending 330 230 285 180 ? You are recommended to draw a table as shown below on your scratch paper and complete it, which will assist you to answer the questions that follow. Year 0 Year 1 Year 2 Year 3 Year 4 Sales Costs Depreciation EBT Tax Net income OCF Capital spending NWC Incremental cash flow Question 3 0.7 pts Compute the incremental net income of the investment for year 2 (The "net income" row in the suggested blank table above). (Do not round intermediate calculations.) Question 4 0.7 pts Compute the incremental net income of the investment for year 3 (The "net income" row in the suggested blank table above). (Do not round intermediate calculations.) D Question 5 0.7 pts Compute the incremental net income of the investment for year 4 (The "net income" row in the suggested blank table above). (Do not round intermediate calculations.) Question 6 0.7 pts Compute the incremental cash flows of the investment for year o (The last row in the suggested blank table above). (Do not round intermediate calculations. A negative amount should be indicated by a minus sign.) D Question 7 0.7 pts Compute the incremental cash flows of the investment for year 1 (The last row in the suggested blank table above). (Do not round intermediate calculations. A negative amount should be indicated by a minus sign.) D Question 8 0.7 pts Compute the incremental cash flows of the investment for year 2 (The last row in the suggested blank table above). (Do not round intermediate calculations. A negative amount should be indicated by a minus sign.) Question 9 0.7 pts Compute the incremental cash flows of the investment for year 3 (The last row in the suggested blank table above). (Do not round intermediate calculations. A negative amount should be indicated by a minus sign.) Question 10 0.7 pts Compute the incremental cash flows of the investment for year 4 (The last row in the suggested blank table above). (Do not round intermediate calculations. A negative amount should be indicated by a minus sign.) Question 11 1 pts Suppose the appropriate discount rate is 10 percent. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
