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What will be the cash flows of this project in millions

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Reference no: EM131356078

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: $110m per year.

Raw materials: $75m per year.

Salaries for new workers: $25m 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: 30%            

Expected salvage value of equipment after 5 years: $30m.

What will be the cash flows of this project in millions?

Reference no: EM131356078

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