Problem:
Target-Mart is planning a new store in Greenwich. The company will lease the needed space for 9 years. Equipment and fixtures for the store will cost $500,000 and will be depreciated totally using the straight-line depreciation method. In addition, inventories valued at $50,000 will also be needed to stock the store at the current time (before opening). Sales are expected to be $1.5 million each year. Operating expenses, ignoring depreciation, will be $750,000 each year. The firm will liquidate the inventory at the end of the 9-year period. The corporate tax rate is 34%. The WACC for Target-Mart is 13.75%.
Required:
Question: What is the NPV and IRR of this project?
Note: Please show guided help with steps and answer.