You are considering a project that requires a capital investment of $100 and will last for three years. Economical depreciation is straight line over 3 years (33.3% in each of the 3 years)) while tax depreciation is straight line over 2 years (50% in year 1 and 50% in year 2), so the scrap value will be zero. Expected EBITDA is $250 in year 1, $150 in year 2, and $100 in year 3. No working capital is required. The corporate tax rate is 30% and the all equity opportunity cost of capital is 10%.

Assuming all equity financing, make a table setting out the cash flow projections for the project. Calculate the cash flows, discount factors and present value of each year's cash flow. Finally, calculate the NPV

calculate

(a) the cash flow of year 2

(b)the present value of the cash flow in year 1

(c)The final NPV