Five year project pre-startup costs of new equpmentassume


Five year project Pre-startup costs of new equpment(assume 5 uear SL) $ 200,000 Investment in market research, done last year $ 100,000 Incremental sales revenue( Year 1-5) $ 750,000 Gross Margin on lost sales of current product (Years 1-5) $ 50,000 COGS(Year 1-5) $ 450,000 Incremental cash expenses(Years 1-5) $150,000 Corporate tax rate 34% Corporate cost of capital 12% Permanent working capital required at outset, to be $ 50000 restored to cash at the end of project life A. Develop the incremental cash flows for the project( C0;C1-C5) B. What is the project's NPV? C. What is the Payabck period? D. What is the IRR? E. What is the P/I index?

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Finance Basics: Five year project pre-startup costs of new equpmentassume
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