Question 12 5 pts Anderson Systems is considering a project

Question 12 5 pts Anderson Systems is considering a project that has an initial cash outflow of $1 million and expected cash inflows of $620,000 per year for the next 3 years. The company uses a WACC of 11% to evaluate these types of projects. What is the project\'s NPV? Your answer should be between 200000 and 700000, rounded to even dollars (although decimal places are okay), with no special characters | Question 13 5 pts Ilinois Tool Works is considering a project that has an initial cash outflow of $1.2 million and expected cash inflows of $332.000 per year for the next 5 years. What is the project\'s IRR? 80 Fa FS F6 F7 FE

Solution

Annual Cash Inflows = $ 620000 for three years, Initial Investment = $ 1000000

WACC = 11 %

PV of Annual Cash Inflows = 620000 x (1/0.11) x [1-{1/(1.11)^(3)}] = $ 1515103.124

NPV = 1515103.124 - 1000000 = $ 515103.12 approximately.

NOTE: Please raise a separate query for the solution to the second unrelated question.