Use the formula to complete

SatyamProject

This company is planning to invest in a project called satyam . The management accounting department received the following information

Capex

$12000

Project period

5 years

Revenue

$8000

Supplies expense

500

Salary

2500

Utilities

500

Discount Rate

14%

Sale of asset @ end of project

$4000

Net working Capital

$2500

The company's tax rate is 27%. The project also earned $1200 as interest revenue. The capital expenditure is depreciated usingstraight line method over the project and will have a residual value of $6000 . the company will have to rent a buildingfor $700 during the project life.

REQUIRED

a)Calculate the initial investment

b)Calculate each year cash flow

c)Calculate the terminal value of the asset used

d)Calculate the NPV

e)Calculate the Profitability Index [PI]

f)Calculate IRR of the project