Compute the cash flows for the project

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Reference no: EM132223304

Assignment -

Use a WACC of 10% for the computation of the NPV and comparison for IRR.

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

Project and equipment life: 5 years

Sales: $25 million per year for five years

Assume gross margin of 60% (exclusive of depreciation)

Depreciation: Straight-line for tax purposes

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

Tax rate: 35%

Use this information (provided above) to compute the cash flows for the project. Also compute NPV and IRR of the project using the Excel spreadsheet (attached).

Attachment:- Assignment Files.rar

Reference no: EM132223304

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