solve

Assume that you have been assigned as a project manager. You are ask to evaluation a potential project with the following: - The project last for 5 years - Initial investment is $10 million - Yearly revenue is: 4 million year 1,7 million in year 2,5 million in year 3,6 million in 4 and \$7 million in year 5. - The operating cost is the 40% total revenue for each year. - Depreciation is calculated on straight-line basis - The cost of capital is (r=10%) - Tax rate is 30% a. Calculate the cashffow for the next 5 years. b. Using the NPV determine whether the project should be accepted or rejected C. If the NPV is greater than zero, will the IRR be greater or less than cost of capital