Calculate the following cash flows for each year initial, Ask an Expert

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Calculate the following cash flows for each year: Initial investment $4,000,000 Project life: 4 years Revenue per year: 2,000,000 Royalty (cost) is 10% of revenue Other expenses: $100,000 DD&A (Depreciation and Amortization) : $260,000 Tax is 30% (of gross income less depreciation)

a. Calculate the net income for each year.

b. calculate the cash flow (net income + depreciation) for each year.

c. What is the net present value (NPV) for this investment (discount rate = 10%)? Should you invest and why?

d. What is the internal rate of return (IRR) for this investment?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92713011

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