What is the npv impact

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The firm gets 100% of its capital from common stock. The equity holder's required rate of return is 10% and the firm's tax rate is 0%. The project involves an immediate investment of $10,000 for the purchase and installation of equipment. The equipment will be depreciated straight-line, over 4 years, down to a salvage value of $ 0. The project is expected to generate operating cashflows [=ebit(1-t)+dep] in the amount of $5,000 at the end of each of the next four years. Assume that at the end of the fourth year the related equipment is sold for $2,000.

-What is WACC?

-What are the FCFFs?

-What is the NPV? What is the IRR?

-Let's say the ATCF is off by +/- 10% from base case value. What is the NPV impact?

-Lets say the OCF values are off by $200 from base case value. What is the NPV impact?

Reference no: EM133072567

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