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Example NPV Template A company is considering to buy a major project worth $22 million....

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Accounting

imageimageimage Example NPV Template A company is considering to buy a major project worth $22 million. It is a five year project. The sales and cost data are provided here: Price per unit =$400 Variable cost per unit =$200 Fixed costs per year =$800,000 Depreciation/CCA per year =$40,000 Tax rate =30% Discount rate =10% REQUIRED: Use the following template, calculate the operating cash flow and net present value. Based on the results of your calculations, would you recommend the project? If yes, why? \begin{tabular}{|l|l|l|l|l|l|} & & & & & \\ \hline DEPRECIATION (+) & & & & & \\ \hline TAXES (ON EBIT) & & & & & \\ \hline \begin{tabular}{l} OPERATING CASH \\ FLOW \end{tabular} & & & & & \\ \hline PRESENT VALUE @10\% & & & & & \\ \hline PV OF CASH INFLOWS & & & & & \\ \hline & & & & & \\ \hline PV OF CASH INFLOWS & & & & & \\ \hline \begin{tabular}{l} PV OF CASH \\ OUTFLOWS \end{tabular} & & & & & \\ \hline NET PRESENT VALUE & & & & & \\ \hline \end{tabular}

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