The question is:

A company estimates 16,500 units of a new product could be sold annually over the next 8 years at a price of $23,500 each. Variable cost per unit is $19,700 and fixed costs total $31 million per year. Start up costs include 80 million to build production facilities, $4.50 million in land, and $15 million in net working capital. The $80 million facility is made up of a building valued at $12 million and $68 million of equipment. The building and equipment qualify for CCA rates of 4% and 20%, respectively. At the end of the project's life, the facilities (including the land) will be sold for an estimated $19.80 million. Assume the building's portion of this value will be $6.50 million. Start-up would also require initial expenses of $3.10 million, which are tax deductible. The company pays taxes at a 33% rate and uses a 16% discount rate on projects such as this one.

1. What is the cash flow in year 0?ANSWER: -101,577,000

2. What is the annual after-tax cash flow excluding the depreciation tax shield in the middle years of the project's life? (i.e. years 1-7)?ANSWER: 21,239,000

3. What is the after tax cash flow excluding the depreciation tax shield in year 8?ANSWER: $56,039,000

4. What is the PV of the CCA tax shield of the building and of the equipment?ANSWER: PVCCATS_{B }= 606,523.39 PVCCATS_{E}= 11,114,788.81

5. What is the NPV,ANSWER: 13,012,725.12

MY WORKINGS

1. $\displaystyle -80,000,000 - 4,500,000 - 15,000,000 - 31,00,000(1-.33) = -101,577,000$

2. $\displaystyle [((-19,700*16,500)- 31,000,000)+(16,500*23,500](1-.33) = 21,239,000$

3. $\displaystyle [19,800,000(salvage value) + 15,000,000(NWC)](1-.33) = 23,316,000$ I can't figure out how to get this value.

4. $\displaystyle PVCCATSB = [(12000000(.33)(.04))/(.04+.16)]*[(1+.05(.04))/(1+.04)] - [(6500000(.04)(.33))/(.04+.16)]*[(1)/(1.16)^8]$

I can't figure this part out either.

Any help is appreciated.