Question: please solve as if youre using excel Aussie Inc. is considering a new three-year project. The project requires an initial investment of $15 million (at
please solve as if youre using excel
Aussie Inc. is considering a new three-year project.
The project requires an initial investment of $15 million (at time 0)
The project is estimated to generate $20 million in sales each year. It has costs of $11 million per
year each year.
The tax rate is 25% and the discount rate (WACC) is 16%.
Use straight line depreciation.
The project has a salvage value of $2million realized at the end of the project.
Additionally, working capital of $3 million is needed to run the project at time 0 and is recovered
at the end of the project.
(a) Generate a cash flow estimate for the project for three years (life of the project) using Excel.
(b) Calculate the NPV (Net Present Value) for the project
(c) Calculate the IRR (Internal rate of return) for the project
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