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Consolidated Industries is considering a 4- year project. The project is expected to generate operating cash flows of $2 million, $3, million, $6 million, and
Consolidated Industries is considering a 4- year project. The project is expected to generate operating cash flows of $2 million, $3, million, $6 million, and $3 million over the four years, respectively. It will require initial capital expenditures of $11 million dollars and an intitial investment in NWC of $4 million. The firm expects to generate a $9 million after tax salvage value from the sale of equipment when the project ends, and it expects to recover 100% of its nwc investments. Assuming the firm requires a return of 17.5% for projects of this risk level, what is the project's IRR? 18.06% 19.45% 18.85% 19.84% 18.45%
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