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Calculate the NPV of the project at the end of the year

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Question - You are the financial manager of an organisation and are planning to invest £20,000 on a new piece of machinery. This machinery will have a useful economic life of 5 years and the cash flows associated with it are expected to be £4,300 annually. The discount rate is 2% (for part b). It is good to use some plain language to briefly explain what you calculate and why.

Required -

a. Calculate the IRR of the project

b. If there is a 18% WDA for the above investment and the corporate Tax Rate is 20%, calculate the NPV of the project at the end of the 5th year.

Reference no: EM132576348

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