Please answer both questions if possible NPV Using the data from problems 4 through 8, calculate the NPV using a 9 required rate of return (WACC) IRR Using the data from problems 4 through 8, calculate the IRR of this project Data Create a pro forma income statement , and enter the Year 5 net income Your company is currently considering the purchase of a new production machine at a cost of $55,000 (including installation costs) and expects to increase revenues by the following amounts each year as a result of the new equipment Year 1 $19,000 Year 2 $28,000 Year 3 $30,000 Year 4 $35,000 Year 5 $15,000 Year 6 $10,000 Fixed costs for running the new equipment will be $5,000 per year, while variable costs will be 15 of sales The assets depreciate according to the 5 year MACRS table The company is not currently paying any interest expense, and they are taxed at 31 of EBIT Operating cash flows Refer back to the data you received in problem 4 After you have calculated the Net Income, calculate the Operating Cash Flows (OCFs) and enter the year 3 OCF Startup or initial costs (Year 0 costs) Continuing with the problem and data in 4 above, if the company paid $52,000 for the equipment, $3,000 for installation costs, and $8,000 for an increase in net working capital (mainly increase raw materials inventory to support the added machinery), calculate the initial years total cash outflow After tax CF from Salvage Continuing with the example in 4, if at the end of the useful life of the equipment, the company can sell it for a salvage value of $3,000, what is the after tax cash flow from salvage in the terminal year (Remember that the tax rate is 31 ) Terminal year CFs Continuing with the example in 4, what is the total year 6 cash flow resulting from this project (equipment purchase)

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Please answer both questions if possible NPV: Using the data from problems 4 through 8, calculate the NPV using a 9% required rate of return

Please answer both questions if possible

NPV: Using the data from problems 4 through 8, calculate the NPV using a 9% required rate of return (WACC)

IRR: Using the data from problems 4 through 8, calculate the IRR of this project.

Data

Create a pro-forma income statement, and enter the Year 5 net income:

Your company is currently considering the purchase of a new production machine at a cost of $55,000 (including installation costs) and expects to increase revenues by the following amounts each year as a result of the new equipment:

Year 1 = $19,000

Year 2 = $28,000

Year 3 = $30,000

Year 4 = $35,000

Year 5 = $15,000

Year 6 = $10,000

Fixed costs for running the new equipment will be $5,000 per year, while variable costs will be 15% of sales. The assets depreciate according to the 5-year MACRS table. The company is not currently paying any interest expense, and they are taxed at 31% of EBIT.

Operating cash flows: Refer back to the data you received in problem #4. After you have calculated the Net Income, calculate the Operating Cash Flows (OCFs) and enter the year 3 OCF:

Startup or initial costs (Year 0 costs): Continuing with the problem and data in #4 above, if the company paid $52,000 for the equipment, $3,000 for installation costs, and $8,000 for an increase in net working capital (mainly increase raw materials inventory to support the added machinery), calculate the initial years total cash outflow.
After-tax CF from Salvage: Continuing with the example in #4, if at the end of the useful life of the equipment, the company can sell it for a salvage value of $3,000, what is the after-tax cash flow from salvage in the terminal year? (Remember that the tax rate is 31%).