View the step-by-step solution to:

FIN 615 NPV and IRR calculations Cost of Capital Time/yr Cash flow Input here Discounted CF NPV PV factor IRR 10.00% 0 1 2 3 4 5 0 0 0 0 0 0 0...

Compute the NPV and IRR with the following information in the Excel spreadsheet:


  • WACC = 110%
  • Initial investment outlay of $30 million, consisting of $25 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year
  • Project and equipment life: 5 years
  • Sales: $25 million per year for five years
  • Assume gross margin of 60% (exclusive of depreciation)
  • Depreciation: Straight-line for tax purposes
  • Selling, general, and administrative expenses: 10% of sales
  • Tax rate: 35%
FIN 615 NPV and IRR calculations Cost of Capital 10.00% Time/yr 0 1 2 3 4 5 Cash flow Input here Discounted CF 0 0 0 0 0 0 NPV 0 =cf1/((1+n)^1=cf2/((1+n)^2)=cf3/((1+n)^3)=cf4/((1+n)^4)=cf5/((1+n)^5) PV factor 0.909090909 0.826446281 0.7513148009 0.6830134554 0.6209213231 IRR Err:523
Background image of page 1
Sign up to view the entire interaction

Top Answer

Refer to the Excel Attached for the... View the full answer

FINC615 NPV-IRR_IP_4 (1).xls

FIN 615
NPV and IRR
calculations
Initial Investment
Project Equipment Life
=
Depriciation =
25000000/5 Year
Sales
COGS
Gross Profit 30000000
5
5,000,000 Years Less Depriciation
Less: Selling,...

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online