What are the one-time cash flows associated with project

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Reference no: EM13264593

Mills Mining is considering an expansion project. The proposed project has the following features. The project has an initial cost of $727--this is also the amount which can be depreciated using the following depreciation schedule: year 1 is 33%, year 2 is 45%, year 3 is 15%, and year 4 is 7%. If the project is undertaken, at t=0 the company will need to increas its inventories by $98, and its accounts payable will rise by $74. This net operating working capital wil be recovered at the end of the prpjects life (t=4). If the project is undertaken, the company will realize an additional $687 in sales over the next four years (t=1,2,3,4). The company's operating cost (not including depreciation) will equal $428 a yea. The company's tax rate is 40%. At t=4, the projects economic life is complete, but it will have a salvage value of $254. The projects WACC = 10%. What are the one-time cash flows associated with ending the project (i.e. terminal Cash flows)? Note, we only want terminal cash flows, not operating cash flows in the last year.

Reference no: EM13264593

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