A proposal to manufacture 5000 t/yr. of a halogenated organic intermediate is set out below:
Estimated fixed capital cost $2,750,000
Construction time 2 years
Working capital 20% of FCI
Operating cost (exc. depreciation) $ 550 per ton of product
Revenue from sales $ 800 per ton of product
Plant life 10 years
Salvage value $425,000
Income tax rate 38 %
Depreciation Life 7 years
im 20%
Assume 50% of the total FCI is spent in first year of construction period
Use sum of year digits depreciation.
No Start-up expense
Land component of FCI is 20%.
Draw the cumulative non-discounted cash flow diagram in excel. Label all key components and upload your diagram and a screenshot of your cash flows. Follow the notes for the proper appearance of said diagram.