The Fleming Manufacturing Company is considering a new
investment. Financial projections for the investment are tabulated
below. The corporate tax rate is 21 percent. Assume all sales
revenue is received in cash, all operating costs and income taxes
are paid in cash, and all cash flows occur at the end of the year.
All net working capital is recovered at the end of the
project.
The Fleming Manufacturing Company Is Considering A New Investment Financial Projections For The Investment Are Tabulate 1 (23.64 KiB) Viewed 35 times
Year 1 Year 2 Year 3 Year 4 Year o 40,000 Investment $ Sales revenue Operating costs Depreciation Net working capital spending $ 20,500$ 21,000 $ 21,500 $18,500 4,300 4,400 4,500 3,700 10.000 10,000 10,000 10,000 510 560 460 ? 460 a. Compute the incremental net income of the Investment for each year. (Do not round Intermediate calculations.) Year 1 Year 2 Year 3 Year 4 Net income b. Compute the incremental cash flows of the Investment for each year. (Do not round Intermediate calculations. A negative answer should be indicated by a minus slgn.) Year 0 Year 1 Year 2 Year 3 Year 4 Cash flow c. Suppose the appropriate discount rate is 12 percent. What is the NPV of the project? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!