What will be the cash flows of this project in millions

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Your firm is considering an overseas expansion. Below is the information that you have been given regarding the project: Initial Equipment Cost: $100m. Life of System: 5 years. Depreciation method: Straight line Depreciation. Expected overseas sales: $120m per year. Raw materials: $70m per year. Salaries for new workers: $20m per year. Net Working Capital necessary for plant to operate effectively: $25m (assume that this investment is required at the start of the project and is recovered when the plant shuts down after 5 years.) Marginal Tax Rate on income and capital gains: 35% Expected salvage value of equipment after 5 years: $30m. What will be the cash flows of this project in millions?

a)-125/26.5/26.5/26.5/26.5/81.5

b)-125/26.5/26.5/26.5/26.5/71

c)-125/25.1/25.1/25.1/25.1/71

d)-100/9.1/9.1/9.1/9.1/28.6

e)-100/26.5/26.5/26.5/26.5/81.5

Reference no: EM131616193

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