22. Your firm has an opportunity to make an investment of $50,000. Its cost of capital is 12 percent.
It expects after tax cash flows (including the tax shield from depreciation) for the next 5 years to
be as follows:
Year 1 $10,000
Year 1 $10,000
Year 2 20,000
Year 3 30,000
Year 4 20,000
Year 5 5,000
a) Calculate the NPV
b) Calculate the IRR (to the nearest percent
c) Would you accept this project?
