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You are examining the desirability of selling widgets. To conduct the analysis, you’ve estimated that you...

You are examining the desirability of selling widgets. To conduct the analysis, you’ve estimated that you will sell 1 million units and will sell the units for $99 each for the next five years. The variable costs for producing this product is estimated to be $23 per unit. Fixed costs will be $5 million per year. The equipment used to produce the widgets will cost $30 million and will be depreciated using the MACRS depreciation schedule for a five-year useful life. In year 5, the equipment will be sold for 30% of its original cost. The tax rate is 21%. Construct a proforma income statement to find the net income and operating cash flow for each of the five years

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