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Linda_us, Finance, Accounts & Homework Tutor
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Experience:  Post Graduate Diploma in Management (MBA)
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1. Project K costs $52,125 its expected net cash inflows are

Customer Question

1. Project K costs $52,125 its expected net cash inflows are $12,000 per year for 8 years and its WACC is 12%. What is the projects NPV?

2. refer to the first question above what is the projects MIRR?

3. Eisenhower Communications is trying to estimate the first year net cash flows (at year 1) for a proposed project. The financial staff has collected the following information on the project.

Sales revenues $10 million
Operating costs ( excluding depreciation) $ 7 million
Depreciation $ 2 million
Interest expense $ 2 million
Submitted: 8 years ago.
Category: Homework
Expert:  Linda_us replied 8 years ago.
HiCustomerbr />
Is the 3 question complete?


Customer: replied 8 years ago.

oh sorry I forgot the rest the rest of the question, it says.


The company has a 40% tax rate, and its WACC is 10%

a. What is the projects net cash flow for the first year (t=1)?

b. If this project would cannibalize other projects by $1 million of cash flow before taxes per year, how would this change your answer to Part a?

c. Ignore Part b. If the tax rate dropped to 30%. How would that change your answer to part a?

Expert:  Linda_us replied 8 years ago.

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