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Question: Artistic Clothing is considering an extension projectwhich includes the construction of a new manufacturing warehouse.The required initial investment for the construction is $2 million.the warehouse will be depreciated over 10 years on a straight-linebasis with no residual value at the end of year 10. Also, companyalso plans to use its own land for the project which is currentlyhired to other company to use as a warehouse. The estimated rentalincome that will be missed over the project life is $300,000 valuedas of today. To start the production, Artistic Clothing needs toinvest in net workingcapital the total amount of $200,000 at the beginning of theproject. This investment will be recovered at the end of theproject.Company also expects to generate an annual revenue of $650,000,its associated cost of sales and operating expense are $250,000.Tax rate is 30%.a. Determine the cash flows of the project from year 1 to year10.b. If company requires a rate of return of 10% from the project,should this project be accepted?c. Calculate the payback period. If the company requires apayback period of less than 6 years, should the project beaccepted?