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A 10-year energy project requires (a) an initial capital cost of $10,000,000.00 to purchase machinery and equipment to be depreciated over 5 years using the

A 10-year energy project requires (a) an initial capital cost of $10,000,000.00 to purchase machinery and equipment to be depreciated over 5 years using the straight-line depreciation method with a half year convention (starting in year 0 and continuing to year 5) and (b) an initial investment of $200,000.00 to purchase mineral resources, which can be capitalized using 18% depletion. Annual revenue is $16,000,000 and annual operating cost is $200,000 for years 1 to 10. The salvage value of the machinery and equipment will be $10,000 while an environmental remediation cost of $100,000 will be required at the end of year 10. The minimum ATCF ROR is 20% and the effective income tax rate is 30%. Calculate the ATCF, NPV, and IRR of the project and make an investment decision.

Please use excel to answer this question and provide your equations as well. If you don't plan on using excel, then please DO NOT answer this question. Thank you.

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