Creative Software Corporation is considering a new project whose data are shown below. The required equipment...

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Creative Software Corporation is considering a new project whosedata are shown below. The required equipment has a 3-year tax life,after which it will be worthless, and it will be depreciated byMACRS over 3 years. Revenues and other operating costs are expectedto be constant over the project’s 3-year life. What is theproject’s IRR and NPV? Briefly discuss your results. Equipment cost$65,000 Sales Revenue each year $60,000 Operating Costs $25,000Salvage Value $15,000 Tax Rate 35%

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Creative Software Corporation is considering a new project whosedata are shown below. The required equipment has a 3-year tax life,after which it will be worthless, and it will be depreciated byMACRS over 3 years. Revenues and other operating costs are expectedto be constant over the project’s 3-year life. What is theproject’s IRR and NPV? Briefly discuss your results. Equipment cost$65,000 Sales Revenue each year $60,000 Operating Costs $25,000Salvage Value $15,000 Tax Rate 35%

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