Calculate the project irr

Reference no: EM131477078

Question: The ABD Company is considering buying a new machine for one of its factories. The machine cost is $100,000 and its expected life span is 8 years. The machine is expected to reduce the production cost by $15,000 annually. The terminal value of the machine is $20,000 but the company believes that it would only manage to sell it for $10,000. If the appropriate discount rate is 15% and the corporate tax is 40%

a. Calculate the project NPV.

b. Calculate the project IRR.

Reference no: EM131477078

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