Financial Plan

| | | Financial plan proposed by: Submitted to: Date: Part II of AirJet scoop out Parts, Inc. Introduction You pass on assume that you lock up work as a financial analyst for AirJet Best Parts, Inc. The company is considering a capital investment in a new shape and you argon in charge of fashioning a testimonial on the leverage based on (1) a given(p) rate of open of 15% (Task 4) and (2) the firms represent of capital (Task 5). Task 4: Capital bud lolling for a in the altogether Machine A a few(prenominal) months entertain now passed and AirJet Best Parts, Inc. is considering the purchase on a new machine that depart amplification the production of a special component significantly. The anticipated funds flows for the stand out are as follows: form 1$1,100,000 form 2$1,450,000 Year 3$1,300,000 Year 4$950,000 You have now been tasked with providing a recommendation for the project based on the results of a terminate Present Value An alysis. Assuming that the ask rate of return is 15% and the initial cost of the machine is $3,000,000. 1. What is the projects IRR? (10 pts) According to the spreadsheet provided above; I measured an Internal gait of Return of 22.376% or 22.4%. 2. What is the projects NPV? (15 pts) The projected force out Present Value of the companies is $450,866.74 3. Should the company intromit this project and why (or why not)? (5 pts) In this scenario AirJet Best Part, Inc should in feature accept this project do to the fact that the IRR is 22.37% or 22.4% and is high than the required rate of return of 15%. improver an additive incentive is that according to the spreadsheet above the NPV is a autocratic issue forth which is always a good thing and they get a profitability index of 15%. 4. Explain how depreciation will affect the present value of the project. (10 pts) Depreciation will not directly affect the NPV of the project because the a mount allocated during the consequence to ! cook up back the cost of acquiring the long margin asset...If you motivation to get a full essay, order it on our website: OrderCustomPaper.com

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