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You are a manager of Johnson & Johnson (JNJ) is considering to produce a new JNJ's medical equipment JNU has marginal tax rate of 35%.

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You are a manager of Johnson & Johnson (JNJ) is considering to produce a new JNJ's medical equipment JNU has marginal tax rate of 35%. J needs to invest a total of $300,000 in today. this will be depreciated 60% in year 1.30% in its actual in 3. Furthermore, of project value in 3 years, the will require a will be essentially equipment will roughly equal expected to be net working capital worthless value well. The starting from starting ofs25,000 the Revenues TO BE ELIGIBLE from year 1. Costs are expected to be are year What is the operating cash flow (OCF) in year 1? What is the NPV of the project? What is the NPV if at the end of the project the equipment can be sold for $I2.000? How would the reported earnings (EBIT) changes if JNJ uses straight-line depreciation instead of 60% - 30% - 10%? Simply state whether it increases, decreases, or stays the same

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