Question: Your firm has an opportunity to make an investment of $50,000. Its cost of capital (interest rate) is 12 percent. It expects after-tax cash flows (including the tax shield from depreciation) for the next 5 years to be as follows:

Year 1                    10,000

Year 2                    20,000

Year 3                    30,000

Year 4                    20,000

Year 5                    5,000

Hint: You can use the Present Value Table A. 1c in pages 552 and 553 of text book which are attached in the e-mail .

1. Calculate the NPV
2. Calculate the IRR (to the nearest percent)
3. State whether this project should be accepted or rejected.

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document