Question
For a fixed capital investment, an investment of 4 million TL is expected in the first year (t0). In the project, which has an economic
For a fixed capital investment, an investment of 4 million TL is expected in the first year (t0). In the project, which has an economic life of 4 years, 3 million TL income is expected in the following years. The annual fixed costs of the project are expected to be 500,000 TL each year and the variable cost is expected to be 20% of the revenue each year. The project will be financed entirely by equity, and the equity cost is 6%. The depreciation method is linear. The tax rate is 10%. There is no scrap value. According to this, a) Find the Net Present Value of this project. b) Find the Discounted Payback Period for this project. c) Show how to find the Internal Rate of Return for this project. d) What is the minimum annual income of this project to make a profit? e) What is the minimum annual income for this project to have a positive Net Present Value?
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