Determine the cash flow from asset for each year

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Raden Pte Ltd wants to embark on a 5-year project that generate an annual revenue of $800,000. The annual fixed cost is $220,000 and the annual variable cost is $350,000. The project requires a new equipment costing $150,000 to be depreciated using the straight-line policy and there is no salvage value at the end of the project. The project needs a net working capital of $100,000. The corporate tax rate is 25% and the required return as 16%.

Problem 1: Produce a Pro Formal Income Statement for the project and estimate the operating cashflow.

Problem 2: Determine the cash flow from asset for each year and compute the net present value for the project.

Reference no: EM132934532

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