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What is the project annual net income

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Reference no: EM132403199

You are considering a 3-year project of which details are summarized below. Your required rate of return for capital budgeting purposes is 20 percent.  

  • Annual sales = 30,000 units 
  • Unit sales price = $5.00
  • Variable costs = $2.00 per unit
  • Annual fixed costs = $18,000
  • Initial capital investment = $72,000, depreciated to zero over 3 years
  • Initial investment in working capital = $20,000, fully recovered at the end of the project
  • The tax rate is 25%.
  • What is the project's annual net income?
  • What is the project's annual operating cash flow?
  • What is the project's initial capital investment?
  • What is the project's NPV?
  • What is the project's IRR? 

Reference no: EM132403199

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