FIN 615 NPV and IRR calculations
Question # 00267646
Posted By:
Updated on: 05/03/2016 01:33 AM Due on: 05/03/2016
Compute the NPV and IRR with the following information in the Excel spreadsheet:
- WACC = 110%
- Initial investment outlay of $30 million, consisting of $25 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year
- Project and equipment life: 5 years
- Sales: $25 million per year for five years
- Assume gross margin of 60% (exclusive of depreciation)
- Depreciation: Straight-line for tax purposes
- Selling, general, and administrative expenses: 10% of sales
- Tax rate: 35%
-
Rating:
/5
Solution: FIN 615 NPV and IRR calculations