34.-39. Assume that you are a financial analyst for Tangshan Mining Company and are given...
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34.-39. Assume that you are a financial analyst for Tangshan Mining Company and are given the following information about the firm's new project: the project's initial after-tax cost at t-0 is $10,000,000 and the project is expected to provide after-tax operating cash inflows as follows: Year One Cash Inflow: $3,800,000 $2,900,000 $1,900,000 800,000 Three Four a. Calculate the payback period for this project 1. If the maximum acceptable payback period is 3 years, should this project be accepted? Why or why not? b. Assume that the firm's "Weighted Average Cost of Capital" (WACC) is 5%. Calculate the Net Presen Value"NPV) for the above project. 1. Based on your NPV calculations above, should this project be accepted? Why or why not
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