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2. You are analyzing a proposed new factory your company is considering. It is expected to cost $31 million, and the inc
Posted: Wed Mar 09, 2022 8:45 am
by answerhappygod
- 2 You Are Analyzing A Proposed New Factory Your Company Is Considering It Is Expected To Cost 31 Million And The Inc 1 (54.58 KiB) Viewed 45 times
2. You are analyzing a proposed new factory your
company is considering. It is expected to cost $31 million, and the incremental after-tax profits are projected to be $1 million in year 1, $6 million in year 2, $11 million in year 3, $12 million in year 4, and $13 million in year 5. You assume after tax returns are received at year-end. The WACC is 9%. a. Draw a timeline. b. Compute the project's NPV. 3. Calculate the IRR for the project in Q2 which requires a financial calculator OR use the MIRR assuming 9% for all PV and FV calculations. a. Based on your answers to Qs 2 and 3, should your
company build the factory?