You are analyzing a proposed new factory your company is considering. It is expected to cost $31mm, and the incremental after tax profits are projected to be $3mm in year 1, $6mm in year 2, $11mm in year 3, $13mm in year 4, and $13mm in year 5. If you assume after tax returns are received at year-end, and the WACC is 9%:
Draw a timeline.
Calculate MIRR.
Should your company build the factory?