Calculate NPV and IRR for the investment

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Calculate NPV and IRR for the following investment. Initial investment = $1,000,000 machine, the project term is 6 years, sales for year 1 are estimated to be $1,000,000, and will grow by 7.5% per year through year 5, sales for year 6 = $500,000, variable costs are estimated to be 30% of sales & fixed costs are 150,000 per year, at the end of year 6 the machinery will become obsolete and will be sold for $100,000, the machine is considered 7-year property under the MACRS rules, the company’s tax rate is 40%, and the discount rate is 12%

Reference no: EM131020108

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