Question: A company is considering a project that requires an initial investment of $810,000 and has a useful life of 12 years. Expected cash receipts from

 A company is considering a project that requires an initial investment
of $810,000 and has a useful life of 12 years. Expected cash
receipts from the project will be $190,000 each year. The salvage value

A company is considering a project that requires an initial investment of $810,000 and has a useful life of 12 years. Expected cash receipts from the project will be $190,000 each year. The salvage value of the assets used in the project will be $80,000. The company's tax rate is 35%. For tax purposes, the entire initial investment (without any reduction for salvage value will be depreciated over 12 years. The company uses a discount rate of 17%. Provide the variables you entered into Excel and your final calculation of net present value after-tax. (If a variable is not used in the calculation, input a zero (O). Omit the "S" and "%" signs in your response. Round answers to the nearest dollar and use a minus sign ( - ) for negative numbers.) Excel input: Rate Nper PMT $ PVC per PMT PV 5 FVSC Net present value Required: Compute the internal rate of return after-tax. Provide the variables you enteredynto Excel for the calculation. If a variable is not used in the calculation, Input a zero (O). Omit the "S" and signs in your response. Round answers to the nearest dollar / whole number and use a minus sign (-) for negative numbers.) Excel / calculator input: Rate Nper PMT PVC Net present value Required: Compute the internal rate of return after-tax. Provide the variables you entered into Excel for the calculation (If a variable is not used in the calculation, input a zero (O). Omit the "S" and "S" signs in your response. Round answers to the nearest dollar/ whole number and use a minus sign() for negative numbers.) Excel / calculator input: Rate Nper PMT FVD Internal Rate of Return (IRR)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!