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1. The projected costs for a new plant are given below in millions: a. Land Cost=$5 b. Fixed Capital Investment=$100 i. Fixed Capital Investment Year
1. The projected costs for a new plant are given below in millions: a. Land Cost=$5 b. Fixed Capital Investment=$100 i. Fixed Capital Investment Year 1=$60 ii. Fixed Capital Investment Year 1=$40 Working Capital= $20 d. Startup at the end of year 2 e. Revenue from Sales=$45 f. Cost of Manufacturing (without depreciation)=$13 . g. Tax Rate=35% h. Depreciation method-MACRS over 5 years i. Profitability should be assessed 5 years after startup j. Project Life:10 years Assuming the Salvage Value of the plant is 0: a) Determine and draw a cumulative after tax cash flow diagram b) Calculate the payback period and the rate of return of investment c) Assuming a hurdle rate of 10% calculate the net present value of the plant. d) Calculate the internal rate of return of the plant. 1. The projected costs for a new plant are given below in millions: a. Land Cost=$5 b. Fixed Capital Investment=$100 i. Fixed Capital Investment Year 1=$60 ii. Fixed Capital Investment Year 1=$40 Working Capital= $20 d. Startup at the end of year 2 e. Revenue from Sales=$45 f. Cost of Manufacturing (without depreciation)=$13 . g. Tax Rate=35% h. Depreciation method-MACRS over 5 years i. Profitability should be assessed 5 years after startup j. Project Life:10 years Assuming the Salvage Value of the plant is 0: a) Determine and draw a cumulative after tax cash flow diagram b) Calculate the payback period and the rate of return of investment c) Assuming a hurdle rate of 10% calculate the net present value of the plant. d) Calculate the internal rate of return of the plant
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