Posted: September 23rd, 2016

The company will evaluate the project over 5 years (not including year 0). The company has a 40% tax rate.

It is expected to produce US$3.5 million in revenue annually the first year and grow 5% per year thereafter.

The project will increase operating expenses by US$1.75 million the first year and grow at 3% annually per year thereafter.

The project cost US$6 million in capital, and the capital will be depreciated on a straight-line basis for 5 years.
The US$6 million will all be spent in the year prior to the first year in which the company generates revenue.

The company will evaluate the project over 5 years (not including year 0).

The company has a 40% tax rate.

For this project you will use a 12% cost of capital and a 13% reinvestment rate.

Given this information, find the NPV, MIRR, and which year the present value cash flows become positive. I need this in an excel spreadsheet as well as 5 slides w/ notes