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What is project w net present value

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Reference no: EM132406460

1. Suppose that Project W has the following cash flows: 

Year. Cash Flow

0. -$25,000

1. $18,000

2. $27,000

3. -$16,000

4. $14,000

If the cost of capital is 14%, what is Project W's net present value (NPV)?  What is Project W's IRR?  What is Project W's MIRR? 

Use the following information to answer questions 1-5.  Madison Technologies is considering change in its method of delivery.equipment would need to be purchased at a cost of $1,250,000 plus an additional $85,000 for shipping and installation.  Madison believes that after 6 years, this equipment can be sold for $240,000.  The company would need to increase its working capital by $150,000.  The increase in revenue from this change is expected to be $600,000 per year with related operating costs of $320,000 per year and depreciation expense of $222,500 per year for 6 years.  Madison is in the 30% tax bracket and its WACC is 9.5%.

2. What is the initial outlay for this project?

3. What are the annual recurring after-tax cash flows for this project?

4. What are the terminal cash flows for this project? Do not include Year 6 operating cash flows.

5. Should Madison change to the new delivery method?  Why or why not?

Reference no: EM132406460

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