What is rhe incremental cash flow of year2

Your company has been doing well, reaching $1.06 million in earnings, and is considering launching a new product Designing the new product has already cost $472,000 The company estimates that it will sell 811,000 units per year for $2 95 per unit and vaniable non-labor costs will be $1.18 per unit. Production will end after year 3 New equipment costing $1.04 million will be required. The equipment will be depreciated using 100 % bonus depreciation under the 2017 TCJA You think the equipment will be obsolete at the end of year 3 and plan to scrap it Your current level of working capital is $294,000 The new product will require the working capital to increase to a level of $386,000 immediately, then to $400,000 in year 1, in year 2 the level will be $357,000, and finally in yoar 3 the level will return to $294,000 Your tax rate is 21%. The discount rate for this project is 10 1% Do the capital budgeting analysis for this project and calculate its NPV Note Assume that the equipment is put into use in year 1 w According to the bonus depreciation schedule, depreciation in year 1 will be $ 1040000 (Round to the nearest dollar) Depreciation in years 2 and 3 will be $ 0 (Round to the nearest dollar) Complete the capital budgeting analysis for this project below (Round to the nearest dollar) Year 0 Year 1 Year 2 2392450 2 392,450 $ Sales S 956,980 S 956980 Cost of Goods Sold 0 S 1.435,470 Gross Proft 1435470 1,040,000 $ 0 S Depreciation 305,470 1435470 EBIT - Tax 0 83,049 $ 301449 312,421 Incremental Earnings 0 1134021 1,040,000 S Depreciation $ Enter any number in the edit flelds and then click Check Answer. P 9-28 (similar to) our company has been doing well, reaching $1.06 million in earnings, and is considering launching a new product. Des 472,000. The company estimates that it will sell 811,000 units per year for $2.95 per unit and variable non-labor costs ear 3. New equipment costing $1.04 million will be required. The equipment will be depreciated using 100% bonus dep quipment will be obsolete at the end of year 3 and plan to scrap it. Your current level of working capital is $294,000. The crease to a level of $386,000 immediately, then to $400,000 in year 1, in year 2 the level will be $357,000, and finally in ax rate is 21%. The discount rate for this project is 10.1%. Do the capital budgeting analysis for this project and calculate Hote: Assume that the equipment is put into use in year 1 Complete the capital budgeting analysis for this project below: (Round to the nearest dollar.) Year 0 Year 1 Year 2 Sales 0 $ 2,392,450 2392450 - Cost of Goods Sold 0 956,980 $ 956980 $ Gross Profit 0 1,435,470 $ $ 1435470 Depreciation 0 1,040,000 $ 0 EBIT 395,470 $ 0 1435470 301449 - Tax 0 $ 83,049 $ Incremental Earnings 312,421 $ 1134021 0 Depreciation 1,040,000 $ 0 0 Incremental Working Capital 92,000 $ 14,000 -43000 1,040,000 S 0 $ - Capital Investment $ (1,132,000) $ 1,338,421 Incremental Free Cash Flow