$1010$ points, $5$ points each

"Caleb Love" Company is considering the following project.

Cost of depreciable machinery for project. $4,000,000$

Earning Before Depreciation and Taxes $($EBDT$)1,300,000$

Life in years $7$

Tax rate $25\%$

Cost of Capital $10\%$

Gain or $($Loss$)$ at end of project from decommission$/$sale$.(1,000,000)$

A What is the NPV$?$

What is the IRR?

Should they do the project? Why?

B Approximately what would the Earnings before Depreciation and Taxes $($EBDT$)$ be if the IRR were: $50\%$