Net present value of the project by inputting the variables

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Reference no: EM131613072

Kendall Corporation is considering a project that would require an initial investment of $1,275,000 and would have a useful life of 10 years. The annual net cash receipts would be $355,000. The salvage value of the assets used in the project would be $105,000. The company’s tax rate is 30%. For tax purposes, the entire initial investment without any reduction for salvage value will be depreciated over 10 years. The company uses a discount rate of 17%.

Required information

Required:

Compute the net present value of the project by inputting the variables that are entered into your calculator / Excel. (If a variable is not used in the calculation, input a zero (0). Omit the "$" and "%" signs in your response.) Round answers to the nearest dollar and use a minus sign ( - ) for negative numbers.

Excel / calculator input:

Interest Rate

(Rate, I, I/YR) %

Nper, N

PMT $

PV $

FV $

Net present value $

Required:

Compute the internal rate of return of the project by inputting the variables that are entered into your calculator / Excel. (If a variable is not used in the calculation, input a zero (0). Omit the "$" and "%" signs in your response.) Round answers to the nearest dollar / whole number and use a minus sign (-) for negative numbers.

Excel / calculator input:

Interest Rate

(Rate, I, I/YR) %

Nper, N

PMT $

PV $

FV $

Internal Rate of Return (IRR) %

Reference no: EM131613072

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