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# Meredith Inc.

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Meredith Inc. is considering a project that would require an initial investment of \$210,000 and would have a useful life of 6 years. The annual cash receipts would be \$126,000 and the annual cash expenses would be \$57,000. The residual value of the assets used in the project would be \$32,000 at the end of the 6th year. The company's tax rate is 30%. For tax purposes, the entire initial investment will be depreciated by the straight-line method to zero salvage value over 5 years. The company uses a discount rate of 10%.

Question: What is the net present value and IRR of the asset?

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Net Present Value & Internal Rate of Return (IRR)

Meredith Inc. is considering a project that would require an initial investment of \$210,000 and would have a useful life of 6 years. The annual cash receipts would be \$126,000 and the annual cash expenses would be \$57,000. The residual value of the assets used in the project would be \$32,000 at the end of the 6th year. The company's tax rate is 30%. For tax purposes, the entire initial investment will be depreciated by the straight-line method to zero salvage value over 5 years. The company uses a discount rate of 10%.

Question: What is the net present value and IRR of the asset?

Year 0 1 2 3 4 5 6
I. Investment Outlay
1. Capital Investments -210,000
2. Total net ...

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This solution is comprised of a detailed explanation to answer what is the net present value and IRR of the asset.

\$2.19