Question
The Rock brothers are considering adding new manufacturing equipment to their many businesses. The all in cost of the assets will be $15,000,000. The cost
The Rock brothers are considering adding new manufacturing equipment to their many businesses. The all in cost of the assets will be $15,000,000. The cost to finance the project is 10%. They expect to have a negative cash flow in year 1 of $1,000,000. They expect net after tax cash flows in years 2 of $6,000,000, year 3 of $5,500,000, year 4 of $4,000,000, and in year 5, the final year of the project, of $7,000,000
What is the NV, IRR, Profitability Index and Payback?
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