Question
An entrepreneur would like to invest $200,000 in a project that would generate, for each year during the next ten years, in each year: (a)
An entrepreneur would like to invest $200,000 in a project that would generate, for each year during the next ten years, in each year:
(a) $140,000 in gross profit,
(b) $90,000 in profit before taxes, and
(c) $40,000 in net profit for the year.
The accountant informed the entrepreneur that the statement of income includes annual depreciation of $10,000. The investment in working capital during the first year of operation would be $60,000. During the last year, he would want to sell the business for $500,000.
a)What is the projects NPV at 10%
B)What is the projects NPV at 20% is
C)What is the projects internal rate of return
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