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Please show excel functions used to get the answer(Show work) 1. You are provided with the following data on a project. a) Unit sales for
Please show excel functions used to get the answer(Show work)
1. You are provided with the following data on a project. a) Unit sales for years 1, 2, 3, 4, and 5 are 74,000, 85,000, 104,000, 96,000 and 68,000, respectively, at a sales price per unit of $375. b) Net working capital: The initial net working capital needed is $1.5 million and additional working capital each year is 15% of the projected sales increase for the following year. c) Total fixed costs are $3.2 million per year and variable costs are $255 per unit. d) The equipment installed cost is $16.5 million and is depreciated using a 7-year MACRS method. e) In five years, the equipment can be sole for about 20% of its acquisition cost. f) The tax rate is 21% and the cost of capital is 18%. What is the NPV and IRR of this project? 1. You are provided with the following data on a project. a) Unit sales for years 1, 2, 3, 4, and 5 are 74,000, 85,000, 104,000, 96,000 and 68,000, respectively, at a sales price per unit of $375. b) Net working capital: The initial net working capital needed is $1.5 million and additional working capital each year is 15% of the projected sales increase for the following year. c) Total fixed costs are $3.2 million per year and variable costs are $255 per unit. d) The equipment installed cost is $16.5 million and is depreciated using a 7-year MACRS method. e) In five years, the equipment can be sole for about 20% of its acquisition cost. f) The tax rate is 21% and the cost of capital is 18%. What is the NPV and IRR of this projectStep by Step Solution
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