Question
Please help with the below questions: Based on the following project assumptions, determine the NPV and the IRR for the project. Equipment invoice$300,000 Transportation and
Please help with the below questions:
Based on the following project assumptions, determine the NPV and the IRR for the project.
Equipment invoice$300,000
Transportation and installation$85,000
Training$20,000
Projected incremental increase in sales in YR 1$245,000
Sales escalate at a rate of 9% per year after YR 1.
Expenses in YR 1 are projected to be 32% of the capital investment.
Expenses escalate at a rate of 4% per year after YR 1.
Depreciation is straight line, 5 years.
Salvage value at the end of YR 3$88,000
WACC10%
Project life3 years
Tax rate40%
Tax credits may be used against other income.
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