Calculate NPV and IRR for the following information: 

Initial investment outlay of $30 million, consisting of $25 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); 

NWC recoverable in terminal year * Project and equipment life: 5 years * Sales: $25 million per year for five years * 

Assume gross margin of 60% (exclusive of depreciation) 

* Depreciation: Straight-line for tax purposes * Selling, general, and administrative expenses: 10% of sales * Tax rate: 35% Assume a WACC of 10%

Answer rating: 100% (QA)

To calculate the NPV and IRR we need to first calculate the cash flows for each year of the project ... View the full answer