We assume that the company you selected is considering a new project. The project has 8 years life. This project requires initial investment of $350 million to purchase equipment, and $18 millionfor shipping & installation fee. The fixed assets fall in the 7-year MACRS class. The salvage value of the fixed assets is 8% of the purchase price (including the shipping & installation fee). The number of units of the new product expected to be sold in the first year is 1,560,000 and the expected annual growth rate is 10%. The sales price is $185 per unit and the variable cost is $135 per unit in the first year, but they should be adjusted accordingly based on the estimated annualized inflation rate of 2.5%. The required net operating working capital (NOWC) is 9.8% of sales. Use the corporate tax rate obtained in Step (4) for the project.

The project is assumed to have the same risk as the corporation, so you should use the

Please use a WACC of 6.93%

After Tax rate of 2.98%

Then,

- Compute the depreciation basis and annual depreciation of the new project.

- Estimate annual cash flows for the 8 years.

- Draw a time line of the cash flows

Please attach screen shot formula sheet

coroprate tax 2.98%