A company has a capital structure consisting of $5,000,000 in debt and $10,000,000 in equity. The company's cost of debt is 7% and its cost of equity is 12%. The company has a tax rate of 30%. The company is considering a new project that requires an investment of $3,000,000 and is expected to generate an after-tax cash flow of $800,000 in each of the next 5 years. The company's WACC is 10%.

Calculate the net present value (NPV) of the project, the internal rate of return (IRR) of the project, and the payback period of the project. Should the company accept or reject the project?

Answer rating: 100% (QA)

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