Using the above information, calculate Taxable Income, Taxes, Annual Net Income, Depreciation, and Annual Net Cash Flows

3 Estimate the annual net income and annual net cash flows from the proposed PMS project. Keep in mind that, you should use only incremental revenues and cost saving from the proposed project, not all forecasted sales revenue and labor cost. You should also include annual recurring costs from this project. The Jones' Hotels uses straight-line depreciation method for depreciating fixed assets, and no salvage value is expected from the disposition of the PMS at the end of its economic life of 10-years. Company's average tax rate is 21%. Use the following table to calculate annual net incomes and annual net cash flows from the proposed PMS project. Initial Investment = 2718900 (5) EBITDA (-) Depreciation (=) Taxable Income (-) Taxes (=) Annual Net (+) Depreciation (=) Annual Net Cash Income Flows All figures are in SUS Year Incremental Project Revenue 1 951,615.00 2 970,647.30 3 990,060.25 4 1,009,861.45 5 1,030,058.68 6 1,050,659.85 7 1,071,673.05 8 1,093, 106.51 9 1,114,968.64 10 1,137,268.01 (+) Labor Cost Savings 45,677.52 46,591.07 47,522.89 48,473.35 49,442.82 50,431.67 51,440.31 52,469.11 53,518.49 54,588.86 (-) Annual Recurring Costs 117,819 117,819 117,819 117,819 117,819 117,819 117,819 117,819 117,819 117,819 879,473.52 899,419.37 919,764.14 940,515.80 961,682.50 983,272.53 1,005,294.36 1,027,756.62 1,050,668.14 1,074,037.88 271,890 271890 271,890 271,890 271,890 271,890 271,890 271,890 271,890 271,890