MetaBruin Building Supply is considering expansion. Operating cash flow will be $300,000 a year. The project will require new equipment costing $850,000 that would be depreciated on a straight-line basis to zero over the 4-year life of the project. The equipment will have a market value of $370,000 at the end of the project. The project requires an initial investment of $325,000 in net working capital, which will be recovered at the end of the project. The tax rate is 28.00 percent. What is the project's IRR? Answer in whole numbers, rounded to three decimal places.
Inputs Cost of goods sold Cash Depreciation Interest expense Selling & Administrative Accounts payable Net fixed assets Sales Accountsreceivable Notes payable Long-term debt Inventory New equity* Tax rate: Dividend percentage: *From sales of shares to the public.
2021 172,500 19,000 62,500 7,500 44,000 41,750 250,000 550,250 97,250 22,240 150,000 55,000 0 32.00% 40.00%
2022 236,053 66,433 84,000 9,116 57,586 63,479 495,000 675,700 94,120 28,474 182,000 83,550 140,000
1.Income Statement Sales Cost of goods sold Selling & Administrative EBITDA Depreciation EBIT Interest EBT Taxes Net income
2021 2022 550,250 675,700 172,500 236,053 44,000 57,586 333,750 382,061 62,500 84,000 271,250 298,061 7,500 9,116 263,750 288,946 84,400 92,463 179,350 196,483
2.Balance Sheet Cash A/R Inventory Current Assets Net Fixed Assets Total Assets A/P N/P Current Liabilities LTD Owners Equity Total Liabilities
2021 2022 19,000 66,433 97,250 94,120 55,000 83,550 171,250 244,103 250,000 495,000 421,250 739,103 41,750 63,479 22,240 28,474 63,990 91,953 150,000 182,000 207,260 465,150 421,250 739,103
Dividends Addition to retained earnings
71,740 107,610
78,593 117,890
#of Shares Outstanding End-of-Day Market Price
11,875 52.25
$
