The following table presents the initial cash outlay and cash flow projections for a new store that

Question:

The following table presents the initial cash outlay and cash flow projections for a new store that TopSports, Inc., is planning to open in Boston, Massachusetts
Initial cash outlay ........ $6,750,000
Net cash inflows—year 1 ..... $2,250,000
Net cash inflows—year 2 ..... $2,250,000
Net cash inflows—year 3 ..... $1,000,000
Net cash inflows—year 4 ...... $700,000
Net cash inflows—year 5 ...... $250,000
(at the end of year 5) .. $750,000

The company uses a of 8% for such project evaluations. The corporate tax rate is 30%. Assume straight-line depreciation for tax purposes.

Required:
a. What is the of the project?
b. What is the for the project?
c. What is the modified for the project?

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