Quixotic Enterprises is about to embark on another venture. Poncho Sanchos, the faithful financial analyst, once again will examine the viability of this venture after 31 failures. A number of...

Extracted text: Quixotic Enterprises is about to embark on another venture. Poncho Sanchos, the faithful financial analyst, once again will examine the viability of this venture after 31 failures. A number of windmills are to be constructed on the southern frontier to generate electricity. They will cost $388,000 and will last 9 years, at which time they will have an estimated salvage value of $29,000. However, a capital upgrade of $99,000 will be required at the end of five years. An inventory of spare parts (working capital) amounting to $10,000 will be required during the term of the venture and will be housed in a warehouse that is currently not being used, but which has been used for Quixotic's previous ventures. The warehouse could be rented out at $5,000 per year. This enterprise is expected to generate cash from the sale of electricity of $140,000 a year for 9 years. Cash expenses for each of the 9 years will be $11,000. The company's tax rate is 23 percent, the CCA rate is 9 percent and the cost of capital is 21 percent. Requirements: A. Calculate the Net Present Value of the Windmill venture by completing the table below: Event Expected Cash Flow After-tax Cash Flow Present Value Enter cash receipts as positive numbers, cash payments as negative numbers. Inital Investment -388000 -388000 Working Capital Revenues Expenses Opportunity Cost Capital Upgrade Salvage Working Capital Revcovery CCA Tax Shield Net present value -10000 -10000 140000 107800 -11000 -5000 -3850 -99000 29000 -10000 N/A N/A N/A N/A B. It's not worth any marks, but it helps with the marking: what number did you use for (Cpv - Spv)? (Enter your answer as a positive number.) C. Should Quixotic dream the impossible dream and invest in the Windmill venture? No 116