Project costs $1,800,000 fixed assets

$10,000 shipping & installation fee

Life of project 8 years

Salvage value of fixed assets 10% of the gross fixed assets

Working capital needed $35,000, expected increase 2.5% each year

Produce 150,000, expected growth 5% each year

Unit price $7

Cost of each unit is $4.5

Inflation rate 2.5% each year

Adjust unit price and variable cost off the inflation rate.

8-year straight-line depreciation for fixed assets

Tax 21%

Cost of capital 11.5%.

0-9 years

Calculate the initial outlay, annual after-tax cash flows, and terminal cash flow for this project.

Calculate the payback period, discounted payback period, NPV, PI, IRR, and MIRR.