Epiphany Industries is considering a new capital budgeting project that will last for three years. Epiphanyplans on using a cost of capital of 12% to evaluate this project. Based on extensive research, it has preparedthe following incremental cash flow projects:I need help to see how I could plug these numbers in my calculator. If you could show me how you found NPV in your calculator. YearSales (Revenues)- Cost of Goods Sold (50% of Sales)- Depreciation= EBIT- Taxes (35%)= unlevered net income+ Depreciation+(-) increase/(decrease) in workingcapital- capital expenditures0123150,000 150,000 150,00075,000 75,000 75,00025,000 25,000 25,00050,000 50,000 50,00017,50017,500 17,50032,500 32,500 32,50025,00025,000 25,0005,0005,000 -10,000-90,000The net present value (NPV) for Epiphany's Project is closest to

NPV Formula: NPV = -Initial Investment + CF₁/(1+r)¹ + CF₂/(1+r)² + CF₃/(1+r)³Where r = 12% = 0.121.…

Year Sales (Revenues) - Cost of Goods Sold (50% of Sales) - Depreciation = EBIT - Taxes (35%) = unlevered net income + Depreciation +(-) increase/(decrease) in working capital - capital expenditures 0 1 2 3 150,000 150,000 150,000 75,000 75,000 75,000 25,000 25,000 25,000 50,000 50,000 50,000 17,500 17,500 17,500 32,500 32,500 32,500 25,000 25,000 25,000 5,000 5,000 -10,000 -90,000 The net present value (NPV) for Epiphany's Project is closest to

Year Sales (Revenues) - Cost of Goods Sold (50% of Sales) - Depreciation = EBIT - Taxes (35%) = unlevered net income + Depreciation +(-) increase/(decrease) in working capital - capital expenditures 0 1 2 3 150,000 150,000 150,000 75,000 75,000 75,000 25,000 25,000 25,000 50,000 50,000 50,000 17,500 17,500 17,500 32,500 32,500 32,500 25,000 25,000 25,000 5,000 5,000 -10,000 -90,000 The net present value (NPV) for Epiphany's Project is closest to

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 8EP

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