An investment project is expected to have the following values (all in millions of $s) in the first year:
Sales revenue: $50
Costs: $10
Depreciation: $12
If the tax rate is 30 percent, what is the after-tax operating cash flow?
a) $48.4 million
b) $19.6 million
c) $31.6 million
d) $28 million
2. You are given these cash flows for an investment project shown below:
0: -$200,000
1: +$110,000
2: +$121,000
The internal rate of return (IRR) of the project is _____.
a) 5%
b) 15%
c) 1.155%
d) 10%