(Comprehensive problem) Metal Winds Ltd is considering a new project that involves the introduction of a new technology for developing small-sized wind mills. Given the uncertain future of this particular technology, it has been decided to base the analysis on a duration of 5 years, and to assume no final value of the equipment. Metal Winds Ltd expects to earn an 8 percent rate of return, and to pay a 28 percent tax rate. Given the following information, determine the free cash flows associated with the project, the project’s net present value, the profitability index, and the internal rate of return. Apply the appropriate decision criteria.
