The minimum after tax cash flow ror

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Consider a project that has 6 years of life time. This project requires investment of $1,000,000 at time zero for machinery and equipment to be depreciated over 5 year with half year straight line depreciation method (starting in year 1 to year 6). Annual revenue is estimated to be $600,000 and annual operating costs of $180,000. Also, $250,000 for working capital investment is needed at time zero and working capital return is expected to equal the initial working capital investment at the end of the project (6^th year). Salvage value of the machinery and equipment is expected to be zero. The minimum After Tax Cash Flow ROR is 12% and the effective income tax rate is 40%. Calculate After Tax Cash Flow, NPV, and ROR of the project.

Reference no: EM131323951

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