Your company is evaluating a new product and you are required to provide a financial evaluation and recommendation 2 4 5 6 8 Marketing has given the following estimates: Project Year 1 Unit Sales 3,000 Selling Price per Unit $ 120 $ 5,000 120 $ 3 6,000 120 $ 6,500 110 $ 6,000 110 $ 5,000 110 $ 7 4,000 110 $ 3,000 110 Operations has given the following estimates: VMC $60 per unit each year Fixed Mfg Costs $25,000 each year Working capital required for this project: $20,000 is required up front; subsequent years is estimated to be 15% of $ sales Cost of Machinery $800,000 Machine depreciated using 7-years MACRS table (provided on next tab) Anticipate salvage value: 20% of original cost of machine Prior to start-up and caused by the installation of the new machine, production will be disrupted causing the loss of 500 units selling for $50 with a VMC of $30 34% Info from the CFO: Marginal tax rate: Required rate of return: Assume o inflation 15% She has asked you to calculate the following and asked for your recommendation, accept or reject the project NPV IRR Payback Taxes @ 34% Net Income + Depreciation + ANWC + NWC Recovery + A Capital Spending + Salvage Value Total Cash Flow $ $ $ $ $ $ $ Cum Cash Flow $ $ $ $ $ $ $ $ $ Payback NPV @ 15% IRR $0 #NUM