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NPV, IRR and MIRR

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Given the following capital project data:

Cost of automation system (invoice): $750,000
Transportation and installation: $150,000
Training: $100,000
Firm's WACC: 10%
Firm's tax rate: 40%
Depreciation 5 years, straight line
Life of project: 3 years
Salvage value: $375,000
Annual cost savings (net): $100,000
Increased annual sales (net): $200,000

Calculate (1) the payback, (2) the discounted payback, (3) the NPV, (4) the IRR, (5) the MIRR, and (6) your recommendation on the project.

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Solution Preview

NPV AND IRR
Given the following capital project data:

Cost of automation system (invoice): $750,000
Transportation and installation: ...

Solution Summary

Solution helps in calculating (1) the payback, (2) the discounted payback, (3) the NPV, (4) the IRR, (5) the MIRR, and (6) your recommendation on the project.

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