FIN 300 Cheat Sheet –SSD36) You are trying to evaluate the following project by its IRR. The project requires an upfront investment of $50,000 and will bring $7,000 after tax cash flows for the following 8 years. What is the IRR of the project? 39) What is the Profitability Index of the following project, which has a discount rate of 10%? Answer 1.5143) A project will produce an operating cash flow of $7,300 a year for three years. The initial cash investment in the project will be $11,600. The salvage value is estimated at $3,500 and will be received during the last year of the project's life. What is the net present value of the project if the required rate of return is 11 percent? Ignore taxes. NPV=$8798.29 45) A project is expected to create operating cash flows of $68,300 a year for 3 years. The initial cost of the fixedassets is $80,000. These assets will be worthless at the end of the project. An additional $6,000 of net working capital will be required at time 0 but will be recaptured at the end of the project. What is the project's net present value if the required rate of return is 14 percent? Ignore taxes. C) $76617.30 7-9) A company will purchase a new machine with a cost of $750,000. The machine requires an initial investment in net working capital of $25,000. Net working capital will remain at this level during the life of the machine and will be recovered at the end. The machine will be operating for 3 years. There is no salvage value associated with the machine. The company does not pay any taxes, the tax rate is zero. The machine will produce10,000 units per year. The price per unit will be $30. The variable cost per unit is $7. There are fixed costs of $50,000 per year. The required rate of return is 12%.