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PLEASE TYPE THE ANSWER. PLEASE ANSWER ALL THE 3 QUESTIONS 3. A project has an...

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Finance

PLEASE TYPE THE ANSWER. PLEASE ANSWER ALL THE 3 QUESTIONS

3. A project has an investment outlay of $7 million in year zero and $3 million in year 1. Operating cost is $3 million per annum and sales revenue of $6 million per annum commencing year 1. In year three there will be the need for an additional capital investment of $4 million. Appraisal life is 5 years. Assuming a discount rate of 8% per annum, compute the IRR and determine the project viability.

4. A project has capital cost of $10,000 in year 0 and $5000 in year 1. There is also the need for capital replacement at year 3 of $4000. Working capital is estimated at $5000 and is needed in year 1. Operating cost from years 2-5 is estimated at $5000 per annum. Revenue is projected to be $8000 per annum between years 2 - 5. Salvage value from sale of fixed assets will be $2000 in year 3 and $4000 in year 5. The working capital is recoverable at the end of year

5. Compute the IRR and determine the project viability assuming the opportunity cost of capital is 25% per annum.

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