A project has the following cash flows and costs: Initial outlay: $20,000 Yearly inflows before tax: $6,000
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Question:
A project has the following cash flows and costs:
•Initial outlay: $20,000
•Yearly inflows before tax: $6,000 for 5 years
•Tax rate: 30%
•Cost of capital: 10%
Requirements:
1.Calculate the NPV.
2.Determine the after-tax cash flows.
3.Compute the payback period.
4.Evaluate the IRR.
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