27 3. Assuming we begin a project, which has the same and WACC as those in this company. You spend $4,000,000 to begin a project and you increasenital (beginning) net 25 working capital by 50,000. At the end of the project, you will be able to recover 30% of your investment back as the salvage value. What are the NPV, IRR and profitability Index 29 (PI) of this project. What if payback is 1.5 years, what will be your decision? What if discounted perback is 2 5years, what will be your decision? Using if statements, show 30 whether you accept or reject the project. Year 1 Year 2 Year 3 Year 4 Year O values $ 4,000,000 50.000 2.950.000 225.000 105,000 475.000 EBIT Depreciation Takes $ $ $ Year o 2,950,000 235,000 1,032 500 Year o Year 2 35 Initial Outlay 36 initial NWC 37 EBIT 38 Depreciation 39 Change in NWC 40 Capital spending Increase per year 42 EBIT Depreciation 44 Change in NWC 45 Capital spending 46 WACC 47 Tax rate 15% 20% Decision Using Statement Payback Discounted Payback