# Calculate Project Cash Flows, NPV and IRR

Not what you're looking for?

Revenues generated by a new fad product in each of the next 5 years are forecasted as follows:

Year Revenue

1 $40,000

2 30,000

3 20,000

4 10,000

Thereafter 0

Expenses are expected to be 40% of revenues, and working capital required in each year is expected to be 20% of revenues in the following year. The product requires an immediate investment of $50,000 in plant and equipment.

A. What is the initial investment in the product? Remember working capital.

B. If the plant and equipment are depreciated over 4 years to a salvage value of zero using straight-line depreciation, and the firm's tax rate is 40%, what are the project cash flows in each year?

C. If the opportunity cost of capital is 10%, what is the projected NPV

D What is the project IRR

Please see attached template 7-21

##### Purchase this Solution

##### Solution Summary

This solution calculates the project cash flows, NPV and IRR.

##### Purchase this Solution

##### Free BrainMass Quizzes

##### Introduction to Finance

This quiz test introductory finance topics.

##### Lean your Process

This quiz will help you understand the basic concepts of Lean.

##### Learning Lean

This quiz will help you understand the basic concepts of Lean.

##### SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

##### Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations