Question
A beverage company is considering an expansion project requiring an initial investment of $3,50,000. The project will produce annual revenues of $80,000 for 9 years.
A beverage company is considering an expansion project requiring an initial investment of $3,50,000. The project will produce annual revenues of $80,000 for 9 years. The company’s tax rate is 35%, and the discount rate is 12%.
Requirements:
- Calculate the after-tax cash flows from the project.
- Determine the NPV of the project.
- Compute the IRR.
- Evaluate the PI of the project.
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Valuation The Art and Science of Corporate Investment Decisions
Authors: Sheridan Titman, John D. Martin
3rd edition
133479528, 978-0133479522
