1.0 Impact on Clothes Dryer Business Animportant consideration regarding new efficiency standards that came to light during the course ofArthurD. Little's interviews with manufacturers, was the pull-through effect ofclothes washers on the clothes dryer market. The majority ofmanufacturers indicated that stringent standards on clothes washers would have an effect on dryers since dryer sales are highly correlatedto washer sales as people frequently buy these appliances as a set. From the manufacturers' data, it is estimatedthat approximately 45 to 55% ofwashers are sold inpairs with dryers. Therefore, any change in washer volumes will impact a significantportion ofthe dryer business. A separate GRIM (referred to as the DryerGRIM) was prepared in an effortto model the financial impact ofthese considerations onthe dryer business.
In conducting the cash flow analysis, the Dryer GRIM assumes that 50% ofclothes washers are sold as pairs with dryers and that the purchase ofthese paired dryers will be directly impacted by changes in washer volumes. The Dryer GRIM estimates the net present value (NPV) ofthe clothes dryerbusiness both inthe absence and inpresence of a standard. 

### Ifa new standardresults in a decrease in clothes washer sales, this negatively impacts the sales ofdryers, thereby reducing the NPV ofthe dryer business.
ADL used industry-average values ofmanufacturerprices, shipments, manufacturing costs and financial informationto performthe dryer cash flow analysis. Industry-average manufacturerprices were obtained from the Current Industrial Reports (CIR). The shipment weightedprice is obtainedby dividing the dollarvalue ofall dryers (both gas and electric) shipped from factories by the quantity ofshipments. Clothes dryer shipments, including those exported and imported were obtained from the AHAM Fact Book. Table 1provides the shipment weighted manufacturerprice and shipments of clothes dryers from 1990 through 1997.

Table 1. Shipment-weighted manufacturer price o1f dryers from 1990 through 1997

in 'OOOs Industry unit 4717 5074 5339 5225 5528 shi ments* Ex ort 105.9 169.2 201.6 181.6 217.4 207.5 368.8 57.4 76.1 140.4 190.1 191.4 324.9 446.4 Dryer produced 4262.6 4236.9 4576.6 4883.9 5147.6 4900.1 5081.7 byU.S. manufacturers 

### * Includes shipments for the U.S. market whether imported or domestically produced, and export shipments.The Dryer GRIM considers the impact ofclothes dryers produced by U.S. manufacturers. The 1996 dryer shipments of5.08 million are used to develop the Base Case shipment forecasts. Future Base Case dryer sales are forecasted using the growth rate projections from the Base Case clothes washer shipment forecasts. Standard Case dryer shipments are calculated assuming that 50% ofclothes washers are sold as pairs with dryers. Hence, for each standard level analyzed, a drop in clothes washer shipments results in a drop inthe dryers that are bought as pairs. Any drop in dryer sales resulting from a standard will result in a negative financial impact onthe dryerbusiness. Disaggregatedmanufacturing costs, namely material, labor and overhead, and financial information, including tax rate, working capital, depreciation, cost ofcapital, etc., were obtained from a top-down analysis ofthe appliance industry. These inputs are similarto those used for the clothes washer GRIM. Table 2 presents the cost and financial informationused inthe Dryer GRIM.
Table 2. Cost and financial information used in the Dryer GRIM


### ·+•Ddt1f•.•· ' ::,;;;;;:•:,;:;}''**~···** •·

# .,.···· .. mir**~.** .Ai·dJ:'.'..

. .• £• v,,, ManufacturerPrice 100% $220.4 Manufacturing Costs Material 52% $114.6 Labor 10.2% $22.5 Overhead (excluding 8.2% $18.3 depreciation) Depreciation 3.5% $7.7 Financial Information Tax Rate 42.8% Discount Rate for NPV 6.65% Working Capital 10.5% Standard SG&A 18.0% R&D 1.8% Ordinary Capital 3.9% Expenditure NetProfitBefore Tax 6.2%
Using the above inputs, the GRIM spreadsheetwasusedto analyze the financial impact at each standard level. The Base Case NPV ofthe clothes dryerbusiness is estimated at $636.3 million. Table 3 presents the Standard Case NPV for each of these levels, along with the change inNPV.Table 3. Standard Case NPV for dryer business

.**:Emcien,~y.** ··**Improvem~nt**·.... ·· 5% 10% 15% 20% 25% 35% 40% 45% 50% 636.3 636.2 636.1 632.6 623.0 595.6 595.6 576.3 574.3 0 0% 0 0% -0.2**~0%** -3.7 -0.6% -B.3 -2.1% -40.7 -6.4% -40.7 -6.4% -60.0 -9.4% -62.0 -9.8%

Atmore stringent standard levels, manufacturers**expt~ct** that they will need to substantially redesign andretool their clothes washerplatforms and these changes could dictate a change to the dryerplatform as well. Manufacturers statedthat small changes in dryer manufacturing lines typically cost approximately $25 million for the whole industry, whereas, complete retooling costs could be as high as $200 million. The Dryer GRIM does not consider any conversion costs (capital and design) that mightbe required to upgrade the dryerplatforms at the more stringent standard levels. Any such investments will increase the negative impact onthe NPV ofthe dryer industry over and above those presentedinTable 3. Furthermore, the GRIM analysis does not account for any negative impact onprofit margins that may result from manufacturing overcapacity and any other competitive dynamics.1.0 Overview of GRIM spreadsheet 

### The Government Regulatory ImpactModel (GRIM) was used to evaluate the cash flow impacts ofregulations onthe clothes washer industry. The basic structure ofthe GRIM, illustrated in Figure 1, is a standard annual cash flow analysis that uses manufacturer price, manufacturing costs, shipments and industry financial information as an input, and accepts a set ofregulatory conditions as changes in costs, investments and associated margms.

Price o1111 Manufacturing Costs

Quantity**~** Financial Information

Cash Flow

Figure 1. Using GRIM to conductthe cash flow analysis


### The GRIM spreadsheet uses a number offactors-annual expectedrevenues, cost of sales, selling and administration costs, taxes, changes in working capital, and capital expenditures related to new standards-to arrive at a series ofannual cash flows, beginning from the base year ofthe analysis and continuing explicitly for several years after the implementation ofthe standard. The measure ofindustry netpresent value (NPV) is calculated by discounting the stream ofannual cash flows.
The GRIM calculates cash flows by year and then**detc~rmines** 

### the present value ofthese cash flows, both withoutregulations (Base Case) 

### and with regulations (Standard Case), 

### using the appropriate discount rate. Forthe purpose ofthis analysis, the Base Case 

### scenario represents the business scenario inthe absence ofa standard. In case a new clothes washer standard comes into effect, it will change the productmix ofclothes washers being sold inthe market and their associated prices, costs and shipments. Such a scenario is calledthe Standard Case 

### scenario. Hence, Base Case 

### NPV implies the present value ofcash flows inthe absence ofa standard. Similarly, Standard Case 

### NPV implies the present value ofcash flows inthe scenario where a standard comes into effect. To project future cash flows, the clothes washer GRIM analysis assumes 2000 as the announcement year ofthe standard, and 2003 as the year when the new standard will come into effect.

12.0 Preliminary cash flow analysis presented at the December 1998 workshop 

### A preliminary version ofthe GRIM (GRIM_lph.xls) accompanied the Preliminary TSD. The preliminary GRIM was used to develop a preliminaryBase Case 

### industry NPV. For the preliminary Base Case 

### analysis, presented atthe December 1998 workshop, information was obtained from the following sources: • Manufacturer's prices were obtained from the AHAM Fact Book and Current Industrial Reports. • Manufacturing costs were estimated using an industry cost structure developed from manufacturers' 10-K statements and the 1992 Census ofManufacturers. • Financial information was obtained from manufacturers' 10-K statements and other publicly available industry statistics such as Standards and Poor's Reports and Moody's Company Reports. • Preliminary future shipments were obtained using currentindustry shipment statistics and projecting a historical annual growthrate of2.3%.

3.0 GRIM spreadsheet for the NOPR Manufacturer Impact Analysis 

### The version ofthe GRIM distributed withthe Preliminary TSD assumed that clothes washer shipments remained the same underboththe Base Case 

### andStandard Case 

### scenarios. Furthermore, the Base Case 

### shipments were assumed to be entirely baseline V

- axis models. It

### was stated at the December 1998 clothes washerrulemaking workshop that shipment scenarios would be modified once the clothes washer shipment information was updatedfor theNational Energy Savings Spreadsheet (NES).
ADL received the shipment forecasts for the NOPR analysis in April 1999, and made modifications to the GRIM inorderto accommodate the new shipmentforecasts. The modified GRIM spreadsheetmodels the market**segm~nts** 

### representing V-axis and H-axis washers in separate worksheets inboththe Base Case 

### andthe StandardCase. 

### Furthermore, additional informationprovidedby AHAM enabledADL to separatetotal incremental fixed costs into the two categories used in GRIM: capitalconversion costs 

### consisting ofequipment and tooling costs; and design conversion costs 

### consisting of R&D and marketing costs. The modified GRIM spreadsheet along with the preliminary Base Case 

### information was then sentto all the manufacturers in advance ofthe scheduled interview dates.
The following subsections presentthe shipment forecasts and describe the modifications madeto the GRIM.

23.1 Shipments Forecasts Priorto beginning the manufacturer visits, AOL updated the GRIM with shipment forecasts developed for the NES. These forecasts included shipments for both Y-axis and H-axis clothes washers. Tables 1and 2 presentthe Base Case and Standard Case shipment forecasts, for the years 1996 through 2012. The methodology used to derive these forecasts is described inthe DOE document entitled "Shipments Write-up."

Table 1. Clothes washer shipmentforecasts for the Base Case and the V-axis standard levels (i.e., 0 to 25% efficienc·y improvement levels)

Baseline EfficiencvLevel1 EfficiencvLevel2 EfflcienrvLevel3 EfficienrvLevel4 EfflciencvLevel5 f:ff. bnnrovement=**5~** 'ff. bnnrovement =JOtn.:**I~rovement**=15tff;**I~rovement**=20' 'ff./mnrovement=25 Base Case StandardCase Standard Case Standard Case Standard Case Standard Case Year V-Axif H-Axif V-Axif H-Axif V-Axif H-Axif V-Axif H-Axif V-Axif H-Axif V-Axif Shipment Shipment Shipment Shipment Shipment Shipment Shipment Shipment Shipment Shipment Shipment

million million million million million million million million million million million 1996 6.00 0.12 6.00 0.12 6.00 0.12 6.00 0.12 6.00 0.12 6.00 1997 6.05 0.25 6.05 0.25 6.05 0.25 6.05 0.25 6.05 0.25 6.05 1998 6.02 0.40 6.02 0.40 6.02 0.40 6.02 0.40 6.02 0.40 6.02 1999 6.08 0.44 6.08 0.44 6.08 0.44 6.08 0.44 6.08 0.44 6.08 2000 6.18 0.48 6.18 0.48 6.18 0.48 6.18 0.48 6.18 0.48 6.18 2001 6.24 0.52 6.24 0.52 6.24 0.52 6.24 0.52 6.24 0.52 6.24 2002 6.28 0.56 6.28 0.56 6.28 0.56 6.28 0.56 6.28 0.56 6.28 2003 6.28 0.60 6.27 0.60 6.27 0.60 6.27 0.60 6.14 0.59 5.81 2004 6.27 0.64 6.26 0.64 6.26 0.64 6.25 0.64 6.14 0.63 5.83 2005 6.27 0.68 6.27 0.68 6.26 0.68 6.26 0.68 6.16 0.66 5.87 2006 6.32 0.72 6.31 0.72 6.31 0.72 6.30 0.72 6.20 0.71 5.93 2007 6.39 0.77 6.38 0.77 6.38 0.77 6.37 0.77 6.28 0.76 6.02 2008 6.43 0.82 6.43 0.81 6.42 0.81 6.41 0.81 6.33 0.80 6.10 2009 6.46 0.86 6.45 0.86 6.45 0.86 6.44 0.86 6.36 0.85 6.16 2010 6.50 0.91 6.49 0.91 6.49 0.91 6.48 0.90 6.41 0.90 6.24 2011 6.53 0.95 6.53 0.95 6.52 0.95 6.51 0.95 6.46 0.94 6.30 2012 6.57 1.00 6.57 1.00 6.56 1.00 6.55 1.00 6.50 0.99 6.36

AtY-axis standard levels, the post-standardproduct mix includes boththe Y-axis and Haxis machines, whereas at the H-axis levels (35% or above) Standard Case shipments include H-axis washers only. H-Axif Shipment

million

0.12 0.25 0.40 0.44 0.48 0.52 0.56 0.56 0.59 0.63 0.68 0.73 0.77 0.82 0.87 0.92 0.97

3Table 2. Clothes washer shipment forecasts for the Base Case and the H-axis standard levels (i.e., 35% to 50% efficiency improvement levels)
Baseline 35 %Elf. 40 %Elf. 45 %Elf. 50 %Elf. Inwrovement lnwrovement Inwrovement lmnrovement Base Case Standard Standard Standard Standard Year V-Axis H-Axis Case Case Case Case Shipment Shipment Shipment Shipment Shipment Shipment

million million million million million million 1996 6.00 0.12 6.12 6.12 6.12 6.12 1997 6.05 0.25 6.30 6.30 6.30 6.30 1998 6.02 0.40 6.42 6.42 6.42 6.42 1999 6.08 0.44 6.52 6.52 6.52 6.52 2000 6.18 0.48 6.66 6.66 6.66 6.66 2001 6.24 0.52 6.76 6.76 6.76 6.76 2002 6.28 0.56 6.84 6.84 6.84 6.84 2003 6.28 0.60 5.41 5.41 4.81 4.75 2004 6.27 0.64 5.52 5.52 4.92 4.86 2005 6.27 0.68 5.63 5.63 5.04 4.98 2006 6.32 0.72 5.76 5.76 5.19 5.13 2007 6.39 0.77 5.94 5.94 5.38 5.32 2008 6.43 0.82 6.12 6.12 5.59 5.53 2009 6.46 0.86 6.31 6.31 5.81 5.76 2010 6.50 0.91 6.51 6.51 6.06 6.01 2011 6.53 0.95 6.69 6.69 6.27 6.23 2012 6.57 1.00 6.85 6.85 6.46 6.42


### Figure 2 illustrates the shipment forecasts graphically. It

### shows a drop in shipments beginning at the standard year (2003) for most efficiency levels, with the negative impact on sales highest at more stringent standard levels. The percentage drop in shipments in the years 2003 and five years thereafter (2008) are outlined in Table 3.

48.50

8.00

7.50

.. 7.00 c**~** 

### 1 J!I 6.50 c 

# .. &.**~** 6.00

5.50

5.00

4.50 CIO 

### "' "' "'**~ ~**  0 0 N (') '¢ Lt) <D .... CIO 

### "' 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N Shipments by Standard Level

0 N (') '¢ Lt) <D .... CIO 

### "' 0**~** N (') '¢ Lt) <D .... CIO 

### "' 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N Year
Figure 2. Clothes washershipmentforecasts for Base Case and the nine potential standard levels.

Table 3. Percentage decrease in shipments in 2003 and 2008

5% 6.88 6.87 0.06% 7.25 7.24 10% 6.88 6.87 0.09% 7.25 7.24 15% 6.88 6.87 0.15% 7.25 7.23 20% 6.88 6.73 2.09% 7.25 7.13 25% 6.88 6.37 7.40% 7.25 6.87 35% 6.88 5.41 21.26% 7.25 6.12 40% 6.88 5.41 21.26% 7.25 6.12 45% 6.88 4.81 30.07% 7.25 5.59 50% 6.88 4.75 30.96% 7.25 5.53 0 (') 0 N -+-base --•fflevel1 eff level 2

, :•,--- eff level 3 -lll-efflevel4 -.-efflevel 5 -t-efflevel6 -efflevel7**~efflevel8** --0- eff level 9

0.06% 0.15% 0.29% 1.58% 5.19% 15.54% 15.54% 22.90% 23.67%

53.1.1 Impact of new energy efficiency standards for clothes washers on export sales Export sales are not included inthe shipment forecasts shown in Tables 1and 2. The shipment forecasts developed for the NES include only clothes washers that are being used domestically. The NES spreadsheet calculates the national energy savings·and hence the shipments used inthis spreadsheet include: • clothes washers that are manufactured inthe U.S. for the domestic market, and

o clothes washers that are imported for use inthe domestic market. Export and import statistics for the U.S. clothes wash1;:r industry, obtained from the Association ofHome Appliance Manufacturers' (AHAM) Fact Book, are presented in Table 4. The AHAM FactBookreports shipments underthree categories: (1) Industry unit shipments (including shipments for the U.S. marketwhetherimported or domestically produced, and export shipments); (2) Exports, and (3) Imports. (Export and import data inthe AHAM FactBook is obtained from the Department ofCommerce's EM545 and IM145 reports, respectively.)
Table 4. Annual shipments ofclothes washers from 1990 through 1996 obtained from the AHAM Fact Book

Industry unit shi ments 6.192
0.601 0.044 6.197 6.515
0.690 0.756 0.035 0.077 6.793 7.035 6.901 7.129
0.764 0.868 0.801 0.884 0.132 0.100 0.105 0.145
As canbe observed inTable 4, export sales accounted for approximately 12.5% of industry unit shipments inthe year 1996.
In orderto account for the impact onboth domestic and export sales, ADL adjusted the shipment forecasts from the NES spreadsheet for the MIA. The shipment information for the year 1996 was used for calibration. The calibrationprocess is summarized inTable 5.

6Table 5. Annual shipments ofclothes washers from 1990 through 1996 obtained from the AHAM Fact Book

Industry unit shi ments* Export Import Clothes washers used domesticall Clothes washers produced byU.S. manufacturers (domestic+ ex ort) 7.129
0.884 0.145 6.245 6.984 6.120
1.141 (=6.984/6.120)


### * Includes shipments for the U.S. market whether imported or domestically produced, and export shipments.

3.2 Manufacturing Costs and Manufacturer Price
3.2.1 Baseline V-axis and H-axis costs and prices
The GRIM developed for the Notice ofProposed Rukmaking (NOPR) MIA analysis considers V-axis and H-axis clothes washer segments separately. The baseline cost ofan H-axis washer was characterizedusing the incremental cost data at the 35% efficiency improvement level as submittedby AHAM, i.e., the Base Case H-Axis washer is assumed to be an H-Axis machine representing a 35% efficiency improvement overthe baseline V-Axis machine (EF=0.817). H-axis costs are equal to the Base Case V-axis costs plus incremental costs for a 35% efficiency improvement level.
Baseline H-Axis cost assumptions used in the GRIM analysis
Baseline V-Axis material cost + Incremental material cost for the 35% efficienc level Baseline V-Axis labor cost+ Incremental labor cost for the 35% efficienc level Baseline V-Axis overhead cost + Incremental overheadcost for the 35% efficienc level Baseline V-Axis depreciation cost + (Incremental capital conversion costperunit for the 35% efficiency level I useful life ofthe fixed investment) Publicly available information suggests that currently soldH-axis washers are, on average, more profitable thanthe baseline V-axis washers characterized in GRIM. To

7reflect this the GRIM assumes a profitof 10%before tax for the H-axis segment comparedto 6.2% for the V-axis market. Thisprofit level likely understates the current profitability ofH-axis models but accounts for the expected increased competition inthis segment infuture years. The baseline H-axis washerprice was estimated using the baseline H-axis washer costs and applying the markup neededto arrive at a 10%profitbefore 

### tax value. This corresponds to a markup of1.5 overthe incremental full production cost atthe 35% efficiency level. Adding this amountto the baseline V-axis price of$285.90 results in a Base Case H-axis washerprice of$478.20.
Baseline 

### H-Axis price assumption used in GRIM analysis
Baseline V-Axis manufacturerprice 

### + Mark-up x (Incremental full productioncostperunit)* Incremental material 

### + incremental labor

### + incremental overhead

### +ca ital conversion

### +desi conversion

Table 6 summarizes the revised cost structures for baseline V-axis and H-axis washers.
Table 6. Industry average baseline cost structur'e

As a% of $perunit Iner. Costover $perunit V-axis baseline V-axis ManufacturerPrice 100% $285.90 $478.20 Markup 1.35 1.50 Manufacturing Costs Material 52.0% $148.67 $86.73 $235.43 Labor 10.2% $29.16 $10.94 $40.24 Overhead 8.3% $23.73 $7.78 $31.23 Depreciation 3.5% $10.01 $22.72 $27.70 SG&A 18.0% $51.46 $86.07 R&D 1.8% $5.15 $8.61

Profit before Tax 6.2% $17.73 $48.88 TaxRate 42.8% Profit afterTax 3.6% $10.14 $27.96

3.2.2 Standards Case Costs and Prices

8Once a standard level is selected, GRIM obtains the incremental costs ofmeetingthe standards level from the AHAM cost submittal in the "AHAM _DATA" worksheet. The costs to upgrade the Y-axis baseline for the standard level selected are shown on the major assumptions page underthe column entitled Y/H-axis. The title reflects the fact thatthe: Y-axis baseline may be converted to Y orH axis depending on the level selected. The base-case H-axis clothes washers (35% efficiency level) will needto be upgraded as well ifthe standards level selected is above 35%. Forexample, the cost ofupgrading an H-axis clothes washer from 35%to 50% is calculated as the cost of upgrading from a baseline Y-axis to 50% less the cost ofupgrading from a baseline Y-axis to 35%. Table 7. Standards Case Costs for the 50% standard level
Standard Case Incremental Costs

Materials IUnit Labor/Unit Overhead IUnit (excl. Depreciation) Industry Mark-up (over full production costs) Standard YearUnit Price

The standards case prices are obtained as: Standards Case manufacturer price = V/H -Axis (over Base Case H-Axis

Baseline manufacturerprice+Mark-up x (incremental full production costperunit)

3.2.3 Standards Case Conversion Costs AHAM provided the lump sum capitalconversion costs necessary to upgrade tooling and production facilities based on an annual production rate of7.068 million clothes washers. AHAM also provided separate onetimeproductconversion costs associated with standards related R&D and marketing. These lump sums are converted in per unit costs on the worksheettitled AHAM _DAT A. Total Conversion costs to upgrade the baseline Y-axis equal perunit conversion costs timesBase Case shipments in standardsyear (2003). Total conversion costs to upgrade the base caseH-axis are based on the H-axisBase Case shipments in the standard year (2003) multipliedbythe difference in conversion costs atthe standard level and 35% level.

9Table 8. Conversion Costs at the 50% standard level
Conversion Costs V/H-Axis ff-Axis (000,000) Base Case Shipments in Standard Year (2003) Capital Expenditures

. ($000,000) Useful Life Per unit capital conversion cost Design & Marketing Expenses (Product Conversion) Per unit product conversion costs 5years ($)per unit ($000,000) ($)per unit

ASSUMPTION: DOE's shipment forecasts suggest significant drops in clothes washer sales after a standard due to price elasticity effects. It is impossible to predict exactly the new shipment numbers after a standard, yet it will benecessary to make an investment decision as to the capacity ofthe plant far in advance ofthe standard. The current assumption in GRIM is that manufacturers will build capacity based ontheirBase Case shipmentforecast forthe standard year. A drop in shipments will result in overcapacity and will be captured in GRIM as an increase in unit conversion costs.

ConversionExpenditureFactors The conversion expenditure factors in the 'ConversionFactors' worksheet have been modified based on comments received. These factors determine the timing ofcapitalconversion investments.

3.2.4 Assumptions used for calculating Variable and Fixed Overhead Costs One ofthe challenges posedby a sudden drop in shipments in the standards case consists of reducing overhead in proportion to lost revenue. The new GRIM allows the userto specify what proportion ofoverhead is variable in the periodthat shipments adjust from their pre-standardto post standard levels. (this assumption is applicable to oneye:arbefore and threeyears afterthe Standardyear, inthe V-Axis-Standard Case).
Short-term Variable Overhead as% ofTotal 60% (this assumption is applicable to oneyear before and '--------'Threeyears after the Standard, in the V-Axis-Standard Cas·e)

3.2.5 Ordinary Capital Expenditures The Base Case ordinary capital expenditures as a percentage ofrevenue has been changed in order to reflect the lower shipmentgrowth forecast comparedto the earlier GRIM. (Capital expenditures of-3.90% instead of-4.43%.) !ordinary Capital Expenditures -3.90%lofRevenue

103.2.6 Discount Rate Based on comments received atthe December 1998 clothes washerworkshop, the real cost ofdebt calculation was revised bytaking the nominal cost ofdebt, adjusting fortaxes, andthen correcting for inflation. As a result ofthis revision, the discountrate for NPVchanged from 7.25% to 6.65%.

3.3 Cash Flow Results
3.3.1 Base Case NPV
GRIM was used to develop the Base Case cash flow estimates for the U.S. clothes washer industry. The baseline manufacturerprice and cost structure developed inthe preliminary TSD (Chapter 6, pg. 6-10 and 6-11) and Section 3.2.1, and summarized in Table 6 was used to develop cash flow estimates and hence the value ofthe V-axis and the H-axis washer segments. The values ofthese two segments were then summedto arrive atthe overall industry value inthe Base Case. The cash flow results are summarized in Table 9.
Table 9. Base Case industry value (NPV)

V-Axis 1040.7 H-axis 276.3 Total 1317.0

11