Spent 40,000,000 on R&D over the last 5 years, developed new battery. The new venture will last 8 year period. $15m to acquire the land, $100m to build the new facility, and $55m for new equiometn. Additional $40m in new net working capital. Assets will depreicate over a 10 year period using straight line depreciation.

They believe they can sell 10,000,000 units each yr priced at $50 per unit and will have variable cost of $40 per unit. Fixed costs will be $30,000,000 each year. It will be so popular it will reduce sales of its existing products by $5m each yr (pre-tax)

After the 8th year, similiar products will limit the profitability of the product. Here is were the firm will exit the business. The equipment can be sold $30M at the end of the 7 years. Land and building will not be sold. tax rate 25% WACC 16%.

Calculate the initial cash flow of this project ( CF occur in year 0). show work

Calculate the operating cash flows for this project (yr 1 thru 8) land is not deprecaited. show work

Calculate terminal cash flow ( CF assoicated with selling the assets and winding down net working capital) show work

Calculate the NPV of the project. show work

Calculate the IRR. show work