Question

Large Manufacturing, Inc. is considering investing in some new equipment whose data are shown below. The equipment has a 3-year class life and will be depreciated by the MACRS depreciation system, and it will have a positive pre-tax salvage value at the end of Year 3, when the project will be closed down. Also, some new working capital will be required, but it will be recovered at the end of the project's life. Revenues and cash operating costs are expected to be constant over the project's 3-year life. What is the project's Initial Cash Outlay at time 0? Enter your answer rounded to two decimal places. Do not enter $ or comma in the answer box. For example, if your answer is $12,300.456 then enter as 12300.46 in the answer box.
	WACC					11.0%
	Net investment in fixed assets (depreciable basis)					$70,000
	Required new working capital					$10,000
	Sales revenues, each year					$95,000
	Cash operating costs excl. depr'n, each year					$30,000
	Expected pretax salvage value					$9,000
	Tax rate					30.0%

--What is the Terminal Year Non–Operating Cash Flow at the end of Year 3?

--What is the project’s NPV?

Answer 1

NPV

Ref	Particulars		Year 1	Year 2	Year 3
a	Operating cash flow		$       65,000.00	$               65,000.00	$      65,000.00
	Gain on sale of asset				$         3,813.00
b	Depreciation		$      (23,331.00)	$             (31,115.00)	$     (10,367.00)
c=a-b	Profit before tax		$       41,669.00	$               33,885.00	$      58,446.00
	Less: taxes		$       12,500.70	$               10,165.50	$      17,533.80
	Profit after tax		$       29,168.30	$               23,719.50	$      40,912.20
	Add: depreciation		$       23,331.00	$               31,115.00	$      10,367.00
	Less: gain on sale of asset				$       (3,813.00)
	Add: working capital+ sale proceeds of asset		$                      -	$                             -	$      19,000.00
	Cash flow after tax		$       52,499.30	$               54,834.50	$      66,466.20
d	Present value factor@ 11.0%		0.900900901	0.811622433	0.731191381
e=c*d	Present value of annual cashflows		$       47,296.67	$               44,504.91	$      48,599.51
	Total present value of annual cash inflows		$     140,401.09
	Less: investment		$       70,000.00
	Working capital		$       10,000.00
	NPV		$       60,401.09

Year 0 outflow = -80,000

Year 3 non-opearting cash flows = 10,000 working capital + 9,000 salvage - 3,813 gain *30% tax rate = 17,856.10

please rate.