Woodard Boats, Inc. is considering beginning production of a new model of ski boat at its Owingsville, KY plant. You have been provided the following pieces of information on this 15 year project.

• The expansion will require the immediate purchase of machinery costing $32,000,000.

• The firm has spent $500,000 to train workers to use the new machinery.

• Sales from this project are expected to be $17,500,000 per year. The operating expenses

  (excluding depreciation) are expected to equal $11,300,000 per year.

• The company uses straight-line depreciation. The project has an economic life of 15 years and

  the machinery has a salvage value of $2,000,000, and will sold for that amount at the

  conclusion of the project.

• Because of the project, the company will need additional net working capital of $1,000,000,

  which can be liquidated at the end of 15 years.

• Woodards marginal tax rate is 40%.

• Woodards cost of capital (WACC) is 10%.

• The initial net cash flow of the project (i.e., CF0) is $ _______. a. -33,000,000 b. -33,500,000 c. -34,000,000

  d. -34,500,000 e. -35,000,000

• The projects operating net cash flow in year 9 is $ ________. a. 4,400,000

  b. 4,460,000 c. 4,520,000 d. 4,580,000 e. 4,640,000

• The projects total cash flow in year 15 is $ _______. a. 7,090,000

  b. 7,520,000 c. 7,680,000 d. 8,370,000 e. 8,580,000

• The NPV of this project is $ _______. a. 21,054,289.09 b. 1,293,412.34 c. 1,597,655.52

  d. 1,793,412.34 e. 2,097,655.52