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What is project IRR?

01 / 10 / 2021 Research Papers

This paper circulates around the core theme of What is project IRR? together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.

Revenues generated by a new fad product are forecast as follows: Year Revenues 1 $5 1 answer below » Revenues generated by a new fad product are forecast as follows: Year Revenues 1 $52,000 2 30,000 3 20,000 4 10,000 Thereafter 0 Expenses are expected to be 50% of
revenues, and working capital required in each year is expected to be 30% of revenues in the following year. The product requires an immediate investment of
$54,000 in plant and equipment. a. What is the initial investment in the product? Remember working capital. Initial investment $ _________ b. If the plant and
equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firms View complete question » Revenues generated by a new fad product are forecast as follows: Year Revenues 1 $52,000 2 30,000 3 20,000 4 10,000 Thereafter 0 Expenses are expected to be 50% of
revenues, and working capital required in each year is expected to be 30% of revenues in the following year. The product requires an immediate investment of
$54,000 in plant and equipment. a. What is the initial investment in the product? Remember working capital. Initial investment $ _________ b. If the plant and
equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firms tax rate is 30%, what are the project cash flows
in each year? (Enter your answers in thousands of dollars. Do not round intermediate calculations. Round your answers to 2 decimal places.) Year Cash Flow 1 $
_________ 2 _________ 3 _________ 4 ________ c. If the opportunity cost of capital is 12%, what is project NPV? (Negative amount should be indicated by a minus
sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV $ __________ d. What is project IRR? (Do not round intermediate
calculations. Round your answer to 2 decimal places.) IRR ______% View less » Oct 26 2013 03:30 PM



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