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Nancy is attempting to evaluate the financial impact of acquiring a new primary care practice. She has decided to use the NPV approach, which is the first time she has used this analysis. Avery's clinic is a for-profit entity, so she will have to deal with taxes as they relate to cash flows. Nancy has gathered the following data for her analysis: 2,650,000 Initial cost of the practice $ Cash flows once the project is completed will be: Year Revenues Expenses Working Capital 1 2 31000000 $ 3250000 $ 3750000 $ 3800000 $ 4400000 $ 18,300,000 $ (2,100,000) $ (2,300,000) $ (2,450,000) $ (2,650,000) $ (3,200,000) $ (12,700,000) $ (145,000) (100,000) (80,000) (50,000) (5,000) (380,000) 4 5 Totals $ Clinic is assumed to have an estimate life of 5 yrs. and a salvage value of: $ 400,000 The clinic will be a for-profit entity with a tax rate estimated to be: 33% Weighted average cost of capital (discount rate) is : 7% Please compute the Net Present Value, Internal Rate of Return, and the break-even year based on after-tax cash flows. NPV IRR Breakeven year: Using undiscounted cash flows only