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Greetings, I have this project that I have to...




Greetings, I have this project that I have to have due by Wednesday, Aug. 21st for FIN 515. I am struggling with it, so wondering if anybody might be able to help out? It would be much appreciated! "Kirby Lou Consulting, Inc. (KLI) has researched and sees a new opportunity. There is an opportunity to consult with researchers to develop a new prescription medication for boredom. KLI will need to buy a new dispensing machine at a cost of $400,000. The IRS considers these 3 year assets so according to MACRS the depreciation would be Year 1 33.33% Year 2 44.45% Year 3 14.81% Year 4 7.41% Additionally, the current risk free rate is 1.50%. The Market Risk Premium is 3.75% and PMWW?s beta is .95. PMWW foresees net revenues not including depreciation for this project as: Year 1 $30,000 Year 2 $220,250 Year 3 $321,372 After year 3 the growth will be a steady 1.05% KLI reluctantly pays taxes at a 30% rate. Kirby has come to you to determine if they should do this project or not and you said ?sure, I can do an NPV analysis and let you know. Please show the details of the NPV analysis that you will present to KLI."


Paper#5352 | Written in 18-Jul-2015

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