Collapse NO IRR methods will always favor the same project even if they projects are mutually exclusive V method assumes that cash flows are reinvested at the IRR while the IRR method assumes that cash flows are reinvested at the WACC QUESTION 3 McKinney Industries is considering an expansion of its production capacity. The necessary equipment would be purchased for $320,000 plus an additional $40,000 for shipping and installation Management believes that after five years, this equipment can be sold for 575.000. The company would need to increase working capital by $12.000. The sales revenue from the project is expected to be $350.000 per year with related operating costs of $240,000 per year and depreciation expense of $60,000 per year for five years. McKinney has a 40% marginal tax rate and its WACC IS TO What are the terminal cash flows for this project? Do not include Year 5 operating cash flows. O $57.000 O $75,000 $81,000 $87,000 $94.000 QUESTION 4 FAST Inc. is considering a new project that will cost $250,000. The expected net cash inflows from this project are $90.000 per year for 4 years, FAST weighted average cost of capital (WACC) is 6. What is the intemal rate of return (IRR) for the project that FAST is considering O 6.0096 0 10.2596 13.9596 Proctor sharing your screen Step sharing 16.369 19.8696