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* * * Solve the problem manually ( i . e . pen and paper ) without using excel * * * A project has

***Solve the problem manually (i.e. pen and paper) without using excel***
A project has equipment requirements that will cost $150,000 installed. NWC of $50,000 will also be required. The project is replacing old equipment that can be sold for $25,000, book value 0. If accepted, each year the project will generate new revenues of $250,000, and new expenses of $125,000. The equipment will be depreciated as a 3 year asset under MACRS. The useful life is 5 years. The new equipment has an estimated salvage value of $20,000. The companys tax rate is 40%.
What is the NINV for the project?
Calculate the NPV,MIRR and PI for the project, if your required rate is 12%?
TABLE 1 MACRS Half-Year Convention
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