Five Year Discounted Cash Flow

Company XYZ can produce 5,000 widgets annually

Each widget is sold for $20 each and the company can increase their price by $2 per widget annually

Cost of goods is 10% of Gross Sales annually

Shipping Expenses are $20,000 in year 1 and increase 5% per annum

Operating Expenses are $25,000 in year 1 and increases $1 per widget per annum

Please prepare a 5 year proforma showing the net income after all the expenses mentioned above have been accounted for each year. 

Then calculate the Net Present Value (NPV) of the five year cash flows by using a discount rate of 11%

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