Investment Criteria

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<p align=”center” style=”margin-bottom:0in;margin-bottom: .0001pt;text-align:center;line-height:normal”><b>Product Line Evaluation</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:200%”><b>Question 1</b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>Description</b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;Amount </b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Cost of new plant and equipment</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$ 24,000,000</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Initial change in net working capital</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$ 480,000</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Total</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$ 24,480,000</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:200%”>The total relevenat intial investment is $ 24,480,000. The cost of designs and prototypes is not to be included as it is a sunk cost that cannot be recovered thus irrelevant for decision making. The changes in net working capital is to be inlcuded due to it is an incremental cash flow to be incurred in case the decision to implement the new product line is taken.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:200%”><b>Question 2</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:200%”>Cash flow from disposal of equipment at the end of the project is $ 2,400,000. Any gain realised from the sale will be taxed at 34% thus reducing the net proceeds.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”><b>Question 3</b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Depreciation cost</p>
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<p align=”center” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal”>$&nbsp; 24,000,000</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Recovery period</p>
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<p align=”center” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal”>5 years</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>DB Factor</p>
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<p align=”center” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal”>200%</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Style</p>
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<p align=”center” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal”>Straight-line</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Convention</p>
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<p align=”center” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal”>Half year</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”>&nbsp;</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;</b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;Basis </b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;Rate </b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;Depreciation </b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;Book Value </b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;&nbsp; 1</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp; 24,000,000</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>20.00%</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp; 4,800,000</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp; 19,200,000</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;&nbsp; 2</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp; 19,200,000</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>32.00%</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp; 7,680,000</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp; 11,520,000</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;&nbsp; 3</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp; 11,520,000</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>19.20%</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp; 4,608,000</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp;&nbsp; 6,912,000</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;&nbsp; 4</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp; 6,912,000</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>11.52%</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp; 2,764,800</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp;&nbsp; 4,147,200</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;&nbsp; 5</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp; 4,147,200</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>11.52%</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp; 2,764,800</p>
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<td nowrap=”nowrap” style=”width:101.1pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:9.15pt” valign=”bottom” width=”135″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp;&nbsp; 1,382,400</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;&nbsp; 6</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp; 1,382,400</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>5.76%</p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;$&nbsp;&nbsp; 1,382,400</p>
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<p align=”center” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:center;line-height:normal”>-</p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”>&nbsp;</p>
<p>&nbsp;</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”><b>&nbsp;</b></p>
<p>&nbsp;</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”><b>Question 4</b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;</b></p>
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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;</b></p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>1</b></p>
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<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>2</b></p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>3</b></p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>4</b></p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>5</b></p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Currency</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Sales</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>(a)</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>16,500,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>17,490,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>18,539,400</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>19,651,764</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>20,830,870</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Cost of goods sold</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>40% (a)</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>6,600,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>6,996,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,415,760</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,860,706</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>8,332,348</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Selling, general &amp; Admin</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>5% &nbsp;(a)</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>825,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>874,500</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>926,970</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>982,588</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,041,543</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Fixed Cost</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>600,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>600,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>600,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>600,000</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>600,000</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Depreciation</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>4,800,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,680,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>4,608,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>2,764,800</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>2,764,800</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Operating income before tax</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>3,675,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,339,500</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>4,988,670</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,443,670</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>8,092,178</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Taxation</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>34%</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,249,500</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>455,430</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,696,148</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>2,530,848</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>2,751,341</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Operating income after tax</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>2,425,500</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>884,070</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>3,292,522</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>4,912,822</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>5,340,838</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Add back: depreciation</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>4,800,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,680,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>4,608,000</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>2,764,800</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>2,764,800</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:152.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”204″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>After-tax operating cash flow</p>
</td>
<td nowrap=”nowrap” style=”width:49.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”66″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,225,500</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>8,564,070</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,900,522</p>
</td>
<td nowrap=”nowrap” style=”width:67.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”90″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,677,622</p>
</td>
<td nowrap=”nowrap” style=”width:.9in;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”86″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>8,105,638</p>
</td>
</tr>
</tbody>
</table>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”>&nbsp;</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”><b>Question 5</b></p>
<table border=”0″ cellpadding=”0″ cellspacing=”0″ style=”width:481.55pt;border-collapse:collapse” width=”642″>
<tbody>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;</b></p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>0</b></p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>1</b></p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>2</b></p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>3</b></p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>4</b></p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>5</b></p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Investment outlay</p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>(24,480,000)</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>After-tax operating cash flow</p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,225,500</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>8,564,070</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,900,522</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,677,622</p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>8,105,638</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>After-tax salvage value</p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>2,054,016</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Return of net working capital</p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>480,000</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Cash flows from new project</p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>(24,480,000)</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,225,500</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>8,564,070</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,900,522</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>7,677,622</p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>10,639,654</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Less: Cash flow from current desk sales</p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,650,000</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,650,000</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,650,000</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,650,000</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,650,000</p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>1,650,000</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:161.75pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”216″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Incremental cash flow</p>
</td>
<td nowrap=”nowrap” style=”width:72.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”97″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>(26,130,000)</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>5,575,500</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>6,914,070</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>6,250,522</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>6,027,622</p>
</td>
<td nowrap=”nowrap” style=”width:11.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”16″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>8,989,654</p>
</td>
</tr>
</tbody>
</table>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:normal”>&nbsp;</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”><b>Question 6</b></p>
<table border=”0″ cellpadding=”0″ cellspacing=”0″ style=”width:476.6pt;border-collapse:collapse” width=”635″>
<tbody>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:121.1pt;border:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”161″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”><b>&nbsp;</b></p>
</td>
<td nowrap=”nowrap” style=”width:72.3pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”96″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>0</b></p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>1</b></p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>2</b></p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>3</b></p>
</td>
<td nowrap=”nowrap” style=”width:66.3pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”88″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>4</b></p>
</td>
<td nowrap=”nowrap” style=”width:40.5pt;border:solid windowtext 1.0pt; border-left:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”54″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”><b>5</b></p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:121.1pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”161″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:72.3pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”96″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:66.3pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”88″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
<td nowrap=”nowrap” style=”width:40.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”54″>
<p align=”right” style=”margin-bottom:0in;margin-bottom:.0001pt; text-align:right;line-height:normal”>$</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:121.1pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”161″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>Incremental cash flow</p>
</td>
<td nowrap=”nowrap” style=”width:72.3pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”96″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>(26,130,000)</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>5,575,500</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>6,914,070</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>6,250,522</p>
</td>
<td nowrap=”nowrap” style=”width:66.3pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”88″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>6,027,622</p>
</td>
<td nowrap=”nowrap” style=”width:40.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”54″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>8,989,654</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:121.1pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”161″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>PV of cash flow</p>
</td>
<td nowrap=”nowrap” style=”width:72.3pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”96″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>(26,130,000)</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>5,115,138</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>5,819,434</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>4,826,550</p>
</td>
<td nowrap=”nowrap” style=”width:66.3pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”88″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>4,270,120</p>
</td>
<td nowrap=”nowrap” style=”width:40.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”54″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>5,842,658</p>
</td>
</tr>
<tr style=”height:12.0pt”>
<td nowrap=”nowrap” style=”width:121.1pt;border:solid windowtext 1.0pt; border-top:none;padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”161″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>NPV using 9%</p>
</td>
<td nowrap=”nowrap” style=”width:72.3pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”96″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;(256,100)</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:58.8pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”78″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:66.3pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”88″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
<td nowrap=”nowrap” style=”width:40.5pt;border-top:none; border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:12.0pt” valign=”bottom” width=”54″>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: normal”>&nbsp;</p>
</td>
</tr>
</tbody>
</table>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:normal”>&nbsp;</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:200%”><b>Question 7</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:200%”>The negative net present value indicates that the new project should be rejected by management. It is because it reduced their value of investments in present day terms.</p>
<p align=”center” style=”margin-bottom:0in;margin-bottom: .0001pt;text-align:center;line-height:200%”><b>Depreciation</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:200%”>Accrual concept of accounting requires matching of benefits with costs in the period they are incurred. Depreciation allocates costs of assets that live beyond a year. As the cost of the asset is enormous and its benefits are reaped beyond a year, depreciation helps distribute that cost over the useful life of the asset (Gallo, 2014).</p>
<p align=”center” style=”margin-bottom:0in;margin-bottom: .0001pt;text-align:center;line-height:200%”><b>Cash Flow</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:200%”>Cash flow is the actual movement of money within a business. It is the true measure of well-being as profits are distorted by different accounting concepts applied. Cash comes into a business when customers pay for products or services. It is utilised in payment for expenses. Inadequate cash flow has led to the collapse of business due to inability to meet obligations (Brooks, 2015).</p>
<p align=”center” style=”margin-bottom:0in;margin-bottom: .0001pt;text-align:center;line-height:200%”><b>Operating Cash Flow</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:200%”>Operating cash flow (OCF) is the money generated from an organization ordinary business operations. It excludes secondary sources of capital which include funds from owners or investments. It is used to measure whether a business can sustain operations and grow. It is derived from deducting expenses from revenue generated (Brooks, 2015).</p>
<p align=”center” style=”margin-bottom:0in;margin-bottom: .0001pt;text-align:center;line-height:200%”><b>Net Present Value</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:200%”>Ascertaining the profitability of a project entails using net present value (NPV). NPV puts into consideration the cost of funds. It is obtained by comparing the cash flows from an investment in its entire lifetime with the initial investment. The net cash flows are then put into present day terms through discounting. Projects that have positive NPV are worth to be pursued (Gallo, 2014).</p>
<p align=”center” style=”margin-bottom:0in;margin-bottom: .0001pt;text-align:center;line-height:200%”><b>Interaction with Business Decisions</b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; text-indent:.5in;line-height:200%”>Cash flows are vital to assessing the viability and soundness of entities. They are preferred to business profits as they are used in running daily operations. Verifying if the core business is doing well involves accessing the generation of positive cash flows. OCF are then used in investing in the firm as well as repaying the financing provided by owners of capital.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt; line-height:200%”>NPV utilizes cash flows to determine the viability of projects. It is obtained by adding back non-cash charges like depreciation to profits to get the OCF. Once fixed capital investment is deducted from the OCF and changes in work capital ascertained, the free cash flow to the firm (FCFF) is obtained. The FCFF is then discounted using the required rate of capital to get the NPV.</p>

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