Iron Company is considering a new equipment which will cost $75,000 today. The equipment would be depreciated on a straight-line basis over the project's 3-year life, would have a zero-salvage value,...


Iron Company is considering a new equipment which will cost $75,000 today.  The equipment would be depreciated on a straight-line basis over the project's 3-year life, would have a zero-salvage value, and would require additional net operating working capital of $18,000. The annual sales revenues of the project are $100,000, and annual operating cost except depreciation is $45,000. Revenues and other operating costs are expected to be constant over the project's life. Iron Company tax rate is 35.0% and its cost of capital is 13.35 percent. What is the project's NPV, what the project's MIRR?


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Jun 05, 2022
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