7 180,000

8 3,710,000
9 FCF 1,104,000
10 FCF (this year) = -$8,070,000 FCF (for each of the next eight years) = $2,023,500
11 Increase in NWC -14
12 D NWC (Required Investment) $ 2100

6 Unlevered Net Income 39

13
14 $140 million
15 $120,000 per year for the four years
16 NPV of replacement $3,916
17 7 FCF (purchase current) -150,000
13 FCF (purchase advanced) -272,750

18 FCF -150,000
19 $655,000.
20 total after-tax proceeds from the sale are 180,000 - 44,856 = 135,144.
21 Foregoing $135,144
22
23
24 a $3 million per year b) $1.05 million per year
25 NPV 2,013,115
26 NPV $158.00
27 NPV $71,539.56
28 NPV 9557
29 NPV 57.3 million b) NPV:20.557.394.0
30 NPV 1203

20%
12.94
35%
-4.529
-8.411

-8.411
12.94
-64.7
-6.5
 -20

-86.671

₹ 144.66
 -5 -6 -1 4
$ 263 -$ 236 -$1364
10 Free
41.6 Cash 32 29.6
Flow

-5,500 -5,500 -5,500 -5,500 -5,500 -5,500 -5,500 -13,000 -13,000 -13,000
9,250 9,250 9,250 9,250 9,250 9,250 9,250 -3,250 -3,250 -3,250

c) 1,0501,6801,008 605 605 302

c) NPV:57.372.598.1
802 498 401 0 -401

1 2 3 4 5
450 450 450 450 450
350 350 350 350 350

32% 19% 12% 12% 6%

20.704 12.4224 7.45344 7.45344 3.72672
35% 35% 35% 35% 35%
27.7536 30.65216 32.3913 32.3913 33.69565
51.5424 56.92544 60.15526 60.15526 62.57763

51.5424 56.92544 60.15526 60.15526 62.57763

20.704 12.4224 7.45344 7.45344 3.72672
 0 0 0 0 0

72.2464 69.34784 67.6087 67.6087 66.30435