3 a). Complete the spreadsheet below by estimating the project's annual after tax cash flow 4 b). What is the investment's net present value at a discount rate of 10 percent? 5). What is the investment's internal rate of return? 6 d). How does the internal rate of return change if the discount rate equals 20 percent? 7 e). How does the internal rate of return change if the growth rate in EBIT is 8 percent instead of 3 percent? 9 Facts and Assumptions 10 Equipment initial cost $ 11 Depreciable life yrs 12 Expected life vrs 13 Salvage value S 14 Straight line depreciation $ 350,000 10 S0 15 EBIT in year 1 16 Tax rate 17 Growth rate in EBIT 18 Discount rate 19 28,000 38% 3% 10% 20 21 Initial cost 22 Annual depreciation Year 10 350,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 23 EBIT 24 25 26 27 28,000 28,84029,705 30,596 31,514 32,460 33,433 34,436 35,47036,534 28 Net present value @ 10% 29 Internal rate of return 30 31