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Change in operating cashflow

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The upgrade will cost the firm a combined total of $23,000,000 up front, but will lower operating expenses by 4,400,000 per year forever. The firm is facing a 38% tax rate.

The market value of the equity is $304,500,000.

The cost of Equity is 19.54%.

1. What is the CF0?

2. What is the change in operating cashflow in year (after tax) CF8?

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The response helps in estimating change in operating cashflow.

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The upgrade will cost the firm a combined total of $23,000,000 up front, but will lower operating expenses by 4,400,000 per year ...

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