a proposed new investment has projected sales of $825,000. Variable costs are 55 percent of sales...

a proposed new investment has projected sales of $825,000. Variable costs are 55 percent of sales and fixed costs are $237,150; depreciation $91,000 per year. Prepare a pro forma income statement assuming a tax rate of 25 percent. What is projected net income? If the project costs $2,000,000, lasts for 6 years and the cost of capital is 15%, compute the NPV and IRR for the project.

Expert Solution

Calculate the NPV and IRR as follows:

Formulas:

jeff jeffy answered 5 months ago

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