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The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated here. The corporate tax rate is 40 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project. Investment Sales revenue Operating costs Depreciation Net working capital spending Net income Year O Year 1 $31,000 Year 1 $ Cash flow 370 $16,000 3,400 7,750 420 a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculations.) Year O $ Year 2 Year 2 $ Year 3 Year 4 $16,500 $17,000 $14,000 3,500 3,600 2,800 7,750 7,750 7,750 470 370 ? b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) Year 1 $ Year 3 $ Year 4 $ Year 2 $ c. Suppose the appropriate discount rate is 11 percent. What

The Best Manufactuing Company is considering a new investment. Financial projections for the investinent are tabulated here. The corporate tax rate is 40 percent. Assume all sales revenue is received in cash, all operating costs and income taxes are pard in cash, and all cash flows occur at the end of the year. All net working capital is recovered at the end of the project a. Compute the incremental net income of the investment for each year. (Do not round intermediate calculotions.) b. Compute the incremental cash flows of the investment for each year. (Do not round intermediate calculations, A negative enswer should be indicated by a minus sign.) c. Suppose the appropriate discount rate is 11 percent. What is the NPV of the project? (Do not round intermediate calculations and round your onswer to 2 decimal places, e.g., 32.16.)

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