Compute cash flows - npv and irr

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Reference no: EM131088457

Question:

1. Initial investment outlay of $30 million, consisting of $25 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year.

2. Project and equipment life: 5 years

3. Sales: $25 million per year for five years

4. Assume gross margin of 60% (exclusive of depreciation)

Depreciation: Straight-line for tax purposes

5. Selling, general, and administrative expenses: 10% of sales

6. Tax rate: 35%

7. compute cash flows,

8. NPV,

9. and IRR

Reference no: EM131088457

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