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Please explain in detail. ID Student: 219,0000 ABC Company is considering a new project with information as belows: - Initial investment is equivalent to ID

Please explain in detail.

ID Student: 219,0000

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ABC Company is considering a new project with information as belows: - Initial investment is equivalent to ID student (unit: billion VND) - Firm is executed free tax for the first two years, since the third year, firm has to pay tax rate is 25% per year. - Fixed asset is applied straight line method within 5 years with the residual value is 0 billion VND, liquidation of this asset is 200 billion VND and is recorded as other income. - Sale, expense and working capital as follows: Unit: billion VND Year 0 1 2 3 4 5 Initial cost ID student Sale 2,500,000 3,000,000 4,000,000 4,500,000 5,000,000 Operating expense 2,000,000 2,500,000 3,000,000 1,700,000 2,000,000 Fixed expense 200,000 200,000 200,000 200,000 200,000 Other income 200,000 Working capital demand 500,000 600,000 500,000 800,000 Assume the interest rate is 12% per year. a. Compute the cash flow of this project b. Compute the NPV, IRR C. Should the firm invest this project? Explain

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