XYZ Corporation is considering an investment in a new production line. The new production line will cost $7,500,000 and is expected to have a useful life of 7 years, with no salvage value. It is expected to generate annual revenues of $3,000,000 and annual operating costs of $1,200,000. Depreciation is calculated on a straight-line basis. The company’s cost of capital is 13%, and the tax rate is 29%.

Requirements:

1. Calculate the Annual Depreciation.
2. Compute the Annual Net Income after tax.
3. Determine the NPV.
4. Find the IRR.
5. Assess the investment’s viability.