Question: Hello, How would I go about calculating the NPV and IRR for this project? Expansion into Western Europe has a forecast to increasesales/revenues and cost

Hello, How would I go about calculating the NPV and IRR for this project?

  • Expansion into Western Europe has a forecast to increasesales/revenues and cost of sales by 10% per year for 5 years.
  • Annual sales for the previous year were $20 million.
  • Start-up costs are projected to be $7 million and an upfront needed investment in net working capital of $1 million. The working capital amount will be recouped at the end of year 5.
  • Because of the higher European tax rate, the marginal corporate tax rate is presumed to be 30%.
  • Being a risky investment, the required rate of return of the project is 12%.

I'm not sure which information I need to use for the calculations.

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