thats all i have info for the question
plz help due in less than 2 hours
NPV | $229,468.47 |
IRR | 15.05% |
The project should be accepted since NPV is positive.
Step 1: OCF
OCF | MACRS 3 year | |||||
Year | Cash flows | Depreciation | EBIT | Tax | PAT | OCF |
1 | 1810000 | -1299870 | 510130 | -107127.3 | 403002.7 | 1702872.7 |
2 | 1810000 | -1733550 | 76450 | -16054.5 | 60395.5 | 1793945.5 |
3 | 1810000 | -577590 | 1232410 | -258806.1 | 973603.9 | 1551193.9 |
Step 2: Salvage
Salvage | |
Purchase price | 3900000 |
Less: Depreciation | -3611010 |
Closing book value | 288990 |
Selling price | 210000 |
Gain/(loss) | -78990 |
Tax/ Saving | 16587.9 |
Net salvage | 226588 |
Step 3: Net Cash flows
Year | Initial cash flow | OCF | Working capital | Salvage | Net cash flows |
0 | -3900000 | -300000 | -4200000 | ||
1 | $1,702,872.70 | 1702872.7 | |||
2 | $1,793,945.50 | 1793945.5 | |||
3 | $1,551,193.90 | 300000 | 226587.9 | 2077781.8 | |
NPV | $229,468.47 | ||||
IRR | 15.05% |
thats all i have info for the question plz help due in less than 2 hours...
thats all the information i have for this question.
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