Question: please write and explain in detail NPV, IRR, payback and payback discounted ABC company is considering a new project with information as belows: Initial investment
ABC company is considering a new project with information as belows: Initial investment is equivalent to 2172670 (unit: billion USD) Firm is executed free tax for the first years, since the second year, firm has to pay tax rate is 20% per year Fixed asset is applied straight line method within 5 years with the residual value is 0, liquidation of this asset is 200 billion USD and is recorded as other income Sale, expense and working capital as belows: Year 0 1 2 3 4 5 Initial cost 2172670 Sale $ 2,500,000 increase 10% with previous year Operating expense $ 2,000,000 $ Fixed expense $ 200,000 $ 200,000 $ increase 10% with previous year Increase 10% with previous year increase 10% with previous year 2,500,000 $ 3,000,000 $ 1,700,000 $ 2,000,000 200,000 $ Other income Working capital demand. $ 500,000 $ 600,000 $ 500,000 $ 200,000 $ 800,000 200,000 200 billion USD interest rate is 12% per year a. NPV, IRR, payback and discounted payback
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