Corporate financial

Page 64: 1. What is the IRR? 2.What is the NPV when cost of capital is 12%

Page 64: Year Incremental Earnings Forecast (SOOOs) o 1 23,500 (9,500) 14,000 (3,000) (1 ,500) 9,500 (3,800) 5,700 1 ,500 (2, 1 00) 5, 100 2 3 4 5 1 2 3 4 5 6 7 8 9 Sales Cost of Goods Sold Gross Profit Selling, General, and Administrative Research and Development Depreciation EBIT Income Tax at 40% Unlevered Net Income 23,500 23,500 23,500 (15,000) (15,000) 6,000 (9,000) (7,500) (16,500) 14.000 (3,000) (1 ,500) 9,500 (3,800) 5,700 1 ,500 7,200 14,000 (3,000) (1 ,500) 9,500 (3,800) 5,700 1 ,500 7,200 14,000 (3,000) (1.500) (1 ,500) 9,500 (1,500) Free Cash Flow (SOOOS) 10 Plus: Depreciation II Less: Capital Expenditures 12 Less: Increases in NWC Free Cash Flow 13 1. What is the IRR? (3,800) 5,700 1 ,500 7,200 600 (900) 1 ,500 2, 100 2,700 2.What is the NPV when cost of capital is 12%?