Compute the NPV and IRR with the following information in the Excel spreadsheet:

• WACC = 110%
• Initialinvestmentoutlayof$30million,consistingof$25millionforequipmentand$5millionfornetworkingcapital(NWC)(plasticsubstrateandinkinventory);NWCrecoverableinterminalyear
• Project and equipment life: 5 years
• Sales: $25 million per year for five years
• Assume gross margin of 60% (exclusive of depreciation)
• Depreciation: Straight-line for tax purposes
• Selling, general, and administrative expenses: 10% of sales
• Tax rate: 35%

FIN 615 NPV and IRR calculations Cost of Capital Time/yr Cash flow Input here Discounted CF NPV PV factor IRR 10.00% 0 1 2 3 4 5 0 0 0 0 0 0 0 =cf1/((1+n)^1=cf2/((1+n)^2) =cf3/((1+n)^3)=cf4/((1+n)^4)=cf5/((1+n)^5) 0.909090909 0.826446281 0.7513148009 0.6830134554 0.6209213231 Err:523