The all-equity firm invests $90 today in a machine which will be depreciated down to $0 over three years of the project’s life. Hurdle is 10% and tax rate is 0%. Annual business plan detail follows. What is the project’s IRR? Revenues $180 -Operating Expenses 150 EBIT 30 Interest 0 EBT 30 Tax 0 Net Income $ 20

The all-equity firm invests $90 today in a machine which will be depreciated down to $0 over three years of the project’s life. Hurdle is 10% and tax rate is 0%. Annual business plan detail follows. What is the project’s IRR? Revenues $180 -Operating Expenses 150 EBIT 30 Interest 0 EBT 30 Tax 0 Net Income $ 20

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 5P

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