Adequate information:
Year | Unit Sales |
1 | 73,000 |
2 | 79,000 |
3 | 84,000 |
4 | 82,000 |
5 | 68,000 |
Initial net working capital (NWC) = $1,500,000
Additional net working capital for Year 1 to Year 4 will be 15% of the projected sales increase in the following year.
Total fixed costs = $3,400,000
Variable cost per unit = $145
Price per unit = $325
Cost of equipment (C) = $18,500,000
Market value = 20% of acquisition cost
Tax rate = 23% or 0.23
Required
To compute: The
Introduction:
Internal rate of return (IRR) is defined as the discount rate at which the aggregate present value of net
Net present value (NPV) is defined as the summation of the present value of cash inflows in each period minus the summation of the present value of
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CORPORATE FINANCE - CONNECT ACCESS
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