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Business, 06.02.2022 14:00 piggygirl211

A project has equipment requirements that will cost $150,000 installed. NWC of $50,000 will also be required. The project is replacing old equipment that can be sold for $25,000, book value 0. Assume that the equipment will be depreciated as a 3-year asset under MACRS. The useful life is 5 years with a 40% tax rate. a. What is the NINV for the project? Calculate the depreciation for each of the 5 years of the asset’s life.

b. Assume the FCF for the project is $95,000 per year for 5 years. Calculate the NPV, IRR, MIRR, and PI for the project if your required discount rate is 12%?


A project has equipment requirements that will cost $150,000 installed. NWC of $50,000 will also be

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