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Reference to IM&CS fertilizer Project's handout If: (1) The IM&C will add another piece of equipment at the beginning of year three. The cost of
Reference to IM&CS fertilizer Project's handout If: (1) The IM&C will add another piece of equipment at the beginning of year three. The cost of this additional equipment is expected to be $2millon. This equipment will be added to the gross fixed assets in the beginning of year three and will be depreciated by MACRS 3-year schedule starting end of year three. (2) This new machine will have no influence on the total production of fertilizer. It is to be standby to replace the current machine annual maintenance. Therefore, will be no change in the annual EBITDA of the IM&C'S fertilizer project. (3) The additional equipment will be sold at the end of the 7th year at $ 320,000. Find out for the project: (a) The NPV (b) The IRR Reference to IM&CS fertilizer Project's handout If: (1) The IM&C will add another piece of equipment at the beginning of year three. The cost of this additional equipment is expected to be $2millon. This equipment will be added to the gross fixed assets in the beginning of year three and will be depreciated by MACRS 3-year schedule starting end of year three. (2) This new machine will have no influence on the total production of fertilizer. It is to be standby to replace the current machine annual maintenance. Therefore, will be no change in the annual EBITDA of the IM&C'S fertilizer project. (3) The additional equipment will be sold at the end of the 7th year at $ 320,000. Find out for the project: (a) The NPV (b) The IRR
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