Use the Information for the Question(s)below

question 43

Essay

Use the information for the question(s)below.
The Sisyphean Corporation is considering investing in a new cane manufacturing machine that has an estimated life of three years.The cost of the machine is $30,000 and the machine will be depreciated straight line over its three-year life to a residual value of $0.
The cane manufacturing machine will result in sales of 2000 canes in year 1.Sales are estimated to grow by 10% per year each year through year three.The price per cane that Sisyphean will charge its customers is $18 each and is to remain constant.The canes have a manufacturing cost of $9 each.
Installation of the machine and the resulting increase in manufacturing capacity will require an increase in various net working capital accounts.It is estimated that the Sisyphean Corporation needs to hold 2% of its annual sales in cash,4% of its annual sales in accounts receivable,9% of its annual sales in inventory,and 6% of its annual sales in accounts payable.The firm is in the 21% tax bracket,and has a cost of capital of 10%.
-Calculate the total Free Cash Flows for each of the three years for the Sisyphean Corporation's new project.

---

Definitions:

Relationship Management

The strategy and practices for managing, fostering, and improving the relationships an organization has with its clients, customers, or stakeholders.

Human Resource Manager

A professional responsible for overseeing the implementation of HR strategies, practices, and operations within an organization.

Trust

The confidence in the honesty, integrity, reliability, and fairness of a person or organization, foundational to relationships and cooperation.

Global and Cultural Effectiveness

The capability of an organization to operate and adapt to the cultural contexts of different societies and the globalized market.