Answer Happy

Use the following information for the next 4 questions. Fiduciary Responsible Tees Corp. is considering launching a new clothing line. The project would require a $17,000,000 capital investment and will be depreciated (straight-line to zero) over its 4-year life. The company discovers at the end of the project that it will be able to sell the equipment for $4,800,000 (salvage value). Incremental sales are expected to be $15,000,000 annually for the 4-year period with costs (excluding depreciation) of 55% of sales. The project would also require the company to increase inventory levels by $1,250,000. The company has a 21% tax rate. What is the project cash flow (cash flow from assets) for Year O? O $17,000,000 -$12,750,000 O $15,750,000 $14,000,000 $18,250,000

What is the project cash flow (cash flow from assets) for Year 2? O $9,582,500 O $6,225,000 O $5,332,500 O $2,500,000 O $6,750,000 $

What is the project cash flow (cash flow from assets) for Year 4? O $12,275,000 O $10,017,000 O $11,267,000 O $7,475,000 O $8,767,000

What is the IRR of the project? O 20.777% O 24.973% 0 23.689% 0 22.692% O 22.010%