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Im trying to calculate NPV and IRR 3 . Calculate the new NPV and IRR . Should the Project be accepted? The CFO thinks that

Im trying to calculate NPV and IRR

3. Calculate the new NPV and IRR.Should the Project be accepted?The CFO thinks that the likely NPV and IRR will be close to the numbers that you calculated in Project 4.

The following questions will be used to estimate risk.Please use Table 3 to calculate cash flow.

4. The controller is worried about tax increases and estimates that the tax rate with be raised to 50% (federal and Maryland state) in year 4.Also there is a concern that expenses are understated.He asks, "What would happen to the NPV calculation if the cash tax expenses come in 2% higher than estimated and the tax rate increases to 50% in year 4?"This will allow a subjective evaluation of the project risk.Calculate a new cash flow time line with cash expenses 10% higher than those in Table 2 and with a 50% tax rate.Use Table 3

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