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1 c ) Your task: Calculate the Net Present Value ( NPV ) for the following two scenarios related to your Assignment 1 and 2

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1c) Your task: Calculate the Net Present Value (NPV) for the following two scenarios
related to your Assignment 1 and 2 Co-working office development project. (5%=5 Marks)
Scenario 1)
Assumptions: Rental income: Year 1) $150,000; Year 2) $200,000; Year 3) $250,000;
Year 4) $300,000. The investment cost incurred included: Construction cost $600,000;
Operation costs $100,000; Management costs $50,000. The assumed discount rate is
6%.
Scenario 2)
Assumptions: Year1) $150,000; Year 2) $200,000; Year 3) $250,000; Year 4) $300,000.
The investment cost incurred included: Construction cost $600,000; Operation costs
$100,000; Management costs $50,000. The assumed discount rate is 8%.
Present your two calculations in table format (see week 8 Tutorial workshop example).
Comment on your results for Scenario 1 and Scenario 2. Make a recommendation on the
target rental income for year 5 for each scenario in order to achieve a present value sum
from year 1 to year 5 of minimum $1,000,000. The assumed discount rates remain at 6%
and 8% respectively for each scenario.
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