Question
A firm undertakes a five-year project that requires an initial capital investment of $140,000. The project is then expected to provide free cash flow from
A firm undertakes a five-year project that requires an initial capital investment of $140,000. The project is then expected to provide free cash flow from operations of $25,000 in the first year, $50,000 in the each of the second and third years, and $40,000 in the fourth year, and $15,000 in the fifth year. The project has an end-of-life salvage value of $3,000 in the fifth year, too. The discount rate is 9.4%.
1. Rounded to the nearest dollar, the net present value of this project is $
2. Rounded to one decimal place as a percent, the internal rate of return for the project is %
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