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Unformatted text preview: Net income before taxes Income tax 40% Net Income Working capital required each year-400-800-1000-1000-900 2-Show the net cash-flows for the project by year Capital investment Net Income Depreciation Change in working capital Net cash flow 1-Using the Capital Asset Pricing Model (CAPM) determine expected return for investors of XYZ Company. 2- Calculate the Weighted Average Cost of Capital (WACC) using the CAPM calculated in 1 for the required rate of return for investors. Amount % total % 1 - tax rate WACC 3- Calculate the Net Present Value (NPV) using the WACC calculated in 2 as the opportunity cost of capital 4- Calculate the Internal Rate of Return (IRR) for the project. 5- Should the Project be accepted?...
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This note was uploaded on 08/22/2011 for the course ACCOUNTING 201 taught by Professor Stevejoseph during the Winter '11 term at Aarhus Universitet.
- Winter '11