The Best Manufacturing Company NPV; Question in Finance

Question Question in Finance The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 31 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. Year 0 Year 1 Year 2 Year 3 Year 4 Investment $ 24000 Sales revenue (Y1) $12500 (Y2) $13000 (Y3) $13500 (Y4) $10500 Operating costs (Y1) 2700 (Y2) 2800 (Y3) 2900 (Y4) 2100 Depreciation (Y1) 6000 (Y2) 6000 (Y3) 6000 (Y4) 6000 Net working capital spending 300 350 400 300 ? Requirement 1: Compute the incremental net income of the investment for each year. Net income Year 1 $ Year 2 $ Year 3 $ Year 4 $ Requirement 2: Compute the incremental cash flows of the investment for each year. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign.) Incremental cash flow Year 0 $ Year 1 $ Year 2 $ Year 3 $ Year 4 $ Requirement 3: Suppose the appropriate discount rate is 12 percent. What is the NPV of the project? Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g. 32.16)) NPV $

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