Question
OTR Trucking runs a fleet of long-haul tucks and has recently expanded into the Midwest, where it has decided to build a maintenance facility. This
OTR Trucking runs a fleet of long-haul tucks and has recently expanded into the Midwest, where it has decided to build a maintenance facility. This project will require and initial cash outlay of $20 Million and will generate annual cash inflows of $4.5 Million per year for Years 1 through 3. In Year 4, the project will provide a net negative cash flow of $5 Million due to anticipated expansion of and repairs to the facility. During Years 5 through 10, the project will provide cash inflows of $2 Million per year. Discount rate is 12%.
a. Calculate the projects NPV. Is the project a worthwhile investment? (3 point)
b. Briefly discuss why you may have more than one IRR for this project. (3 points)
c. Calculate the projects MIRR. Is the project a worthwhile investment based on this measure? (4 points)
Can someone help me with solving this using a financial calculator
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