Question: Blinken manufacturing is considering a three - year project with an initial cost of 7 8 0 , 0 0 0 . The project would

Blinken manufacturing is considering a three

-

year project with an initial cost of

780, 000 .

The project would not directly produce any sales but will reduce operating cost by

300, 000

a year that equipment is depreciated straight line to a zero book value over the life of the project at the end of the project, the equipment will be sold for an estimated $

20, 000 .

The tax rate is

30 % .

The project will require

40, 000

and extra inventory for spare parts and accessories. What is the IRR on this project and should the project be implemented it blink WACC is

8 %

What is the annual depreciation? What is the annual operating cash flow?What is the net salvage value?

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