A project requires $2,000,000 of fixed capital investment and $150,000 of working capital investment. The project is expected to last five years and generate revenues and costs as follows:

	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
Fixed capital investment	-2,000,000
Working capital investment	-150,000
Unit sales		400,000	380,000	360,000	340,000	320,000
Sales price		20	20	20	20	20
Unit variable cost of sale		8	8	8	8	8
Fixed oper. cost exclud. depreciation		200,000	200,000	200,000	200,000	200,000
Salvage value of fixed capital						300,000
Salvage value of working capital						150,000
Tax rate		15%	15%	15%	15%	15%
Straight-line depreciation		20%	20%	20%	20%	20%

Complete the following table to estimate the free cash flow. Use only numbers, no commas.

	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5
Sales revenue	0	A	B	C	D	E
The variable cost of sales	0	F	G	H	J	K
Gross profit	0	L	M	N	O	P
Less op. cost ex. dep.		200,000	200,000	200,000	200,000	200,000
Depreciation		Q	Q	Q	Q	400,000
EBIT		R	S	T	U	V
Tax		W	X	Y	522,000	486,000
EBIT(1-T)		3,570,000	Z	AA	BB	2,754,000
EBIT(1-T) + depreciation		3,970,000	CC	DD	EE	3,154,000
Salvage value of fixed capital						300,000
tax on salvage value						FF
after-tax salvage value						GG
Recovery of working capital						150000
Projected free cash flow	-2150000	HH	3766000	JJ	KK	LL

Assume that the cost of capital is 8%. What are the projected NPV, IRR, and Payback periods?

NPV =___

IRR =___%

Payback =___

Question 27 options:

1234567891011	3,970,000
1234567891011	12,470,000
1234567891011	8,000,000
1234567891011	3,040,000
1234567891011	3,562,000
1234567891011	400,000
1234567891011	178
1234567891011	255,000
1234567891011	1
1234567891011	3,366,000
1234567891011	4,320,000

1.	A
2.	G
3.	N
4.	Q
5.	Z
6.	DD
7.	GG
8.	HH
9.	Payback period
10.	NPV
11.	IRR (in %)