Q#2:Alexandra five Steel Inc. is considering a new project to expand its business. The project will involve the following cash flows.

Year	Cash flows
0	(120000)
1	27000
2	32000
3	26000
4	19000
5	16000
6	17000
7	15000

For cost recovery purpose asset falls in five year property classes for which depreciation rates are (20%,32%,11.52%,11.52%,5.76%).The tax rate is 25% and the required rate of return is 13%.

Requirement

1. Calculate after-tax cash flows
2. Calculate the Payback period.
3. Calculate the net present value. Is it acceptable?
4. Calculate IRR.