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Show Excel functions =NPV and =IRR 9. Calculating Project OCF [LO1] Quad Enerpriese is considering a...

Show Excel functions =NPV and =IRR

9. Calculating Project OCF [LO1] Quad Enerpriese is considering a new three-year expansion
project that rerrquires an initial fixed asset investment of $2.9 mllion. The fized asset will be
depreciated striaght-line to zero over its three-year tax life, after which time time it will be
worthless. The project is estrimate to generate $2,190,000 in annual sales with costs of $815,000.

If the tax rate is 35 percent, what is the OCF for this project?
10. Calculating Project NPV [LO1] In the previous problem, suppose the required return on the project
is 12 percent. What is the project's NPV

Solutions

Expert Solution

Calculate the NPV and IRR of the project as follows:

Formulas:

jeff jeffy answered 1 year ago
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