... free cash flows The table below shows the results of the free cash flow projections for the years 1980 to 1984. The appendix 6.2 shows the details that led to these results. 1980 1981 1982 1983 1984 Free Cash Flows $1'212'160 $1'422'360 $1'912'200 $2'095'680 $2'093'520 2.2. Assumptions * Tax rate: As Dixon considers to acquire the Collinsville Plant we based our calculation on Dixon's average tax rate of 48 %. * Economics of scale: We did not take into account any cost saving due to the fact that Dixon would absorb a part of the sodium chlorate production themselves what would potentially reduce sales costs. 3. Net Present Value Using the WACC Method 3.1. Net present Value The NPV was calculated with the discount rate as computed in part 1 (WACC 7.98%). The result shows, that the net present value of this acquisition is slightly negative. 1979 1980 1981 1982 1983 1984 Free Cash Flows $1'212'160 $1'422'360 $1'912'200 $2'095'680 $2'093'520 Salvage Value of the plant $7'560'000 Borrowing -$12'000'000 Total -$12'000'000 $1'212'160 $1'422'360 $1'912'200 $2'095'680 $9'653'520 Discounted Cash Flows (using WACC) -$12'000'000 $1'122'578 $1'219'896 $1'518'810 $1'541'529 $6'576'110 Net present Value -$21'077 3.2. Assumptions * Total investment cost I0 is the acquisition ...

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