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Foley Systems is considering a new investment with the data shown in the following. The equipment would be depreciated on a straight-line basis over the

Foley Systems is considering a new investment with the data shown in the following. The equipment would be depreciated on a straight-line basis over the projects three-year life, would have a zero-salvage value, and would require no additional net operating working capital. Revenues and operating costs are expected to be constant for the projects life. The tax rate is 35%. What is the projects NPV, IRR, Discounted Payback, and Profitability Index?

Cost of Capital

12.00%

Net Investment

900,000

Revenue

650,000

Op Costs (excluding depreciation)

200,000

Depreciation Rate of Cost Value

33.33%

Tax Rate

25.00%

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