Question

A capital budgeting project will cause EBIT to increase by $55916 per year. The annual depreciation...

A capital budgeting project will cause EBIT to increase by $55916 per year. The annual depreciation expense is $42315. The firm's tax rate is 20%. At the end, the equipment will be sold for its salvage value of $41648; its book value will be $24512 at that time. The initial increase in net working capital of $11777 will be recaptured at the end of the project's life. What is the cash flow in the last year of the project's life, in $? Include both the annual FCF and the terminal CF.

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