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3) A company has the following cost and revenue: years 0 4 Initial Investment Operating Cost (Actual $) R and D cost (Constant $) Revenue
3) A company has the following cost and revenue: years 0 4 Initial Investment Operating Cost (Actual $) R and D cost (Constant $) Revenue (Actual S) 8000 1500 500 5000 2000 500 6000 2500 500 7000 3000 500 8000 3500 500 0 If the market interest rate is 10% and inflation rate is 5% determine the following 1) Project balance for year 0 -5.Draw project balance diagram (all in Actual dollar) 2) NFV and NPV 3) What are the area of risk and profit? 4) What is payback period with and without interest? 5) Where would you stop the project? Why
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