Question: Find the NPV, IRR, Payback, and MIRR with this information.

Sallys Seashells has created a new product that will be used as an initial sales item for this new company. The product will require a $10 million investment in equipment and the net working capital requirement is 10% of sales. The each unit sells for $24,000 with variable costs of $17,500 per unit. Following the first year, the sales price and variable costs will increase at the Feds target rate of inflation: 3% per year. Sallys Seashells fixed costs are $1 million each year and will increase with inflation. Since Sallys Seashells is a new firm, the first year of the project will be spent acquiring the equipment and setting up operations. The project has an expected life of 4 years. There are no options to abandon the project early.

The company anticipates sales of 1,000 units each year. The projected value of the equipment at the end of the project is $500,000. Sallys Seashells is subject to a 40% federal plus state tax rate. For average risk projects the cost of capital is 10%.