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2. Table 2 shows the cash flow for the costs of the Self Performing Contractor and estimates for revenues from a residential project. (in x1000
2. Table 2 shows the cash flow for the costs of the Self Performing Contractor and estimates for revenues from a residential project. (in x1000 USD) a) Calculate the Net Cash Flow and the Cumulative Cash Flow for the project (Fill in Table 2) (2 points) b) Calculate payback period for the project? (2 points) c) Calculate the Net Present Value (NPV) of the project for the Self Performing Contractor, if the discount rate is i=8% (6 points). d) Calculate the NPV for an inflation rate of 10% for each year (4 points) d) Would you invest in this project? Explain why?/why not? (2 points) Year 7 Table 2. Predicted Costs and Revenues for Calculation of Cash Flows Parameter Year 0 Year 1 Year 2 Year 3 JYear 4 Year 5 Year 6 Costs -2,500 -1,200 -1,000 -3,000 -3,000 -2,000 -2,000 Revenues 0 0 2,500 5,400 6,000 4,000 2,000 Net Cash Flow Cumulative Cash Flow 1,000
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