Question
An IT company plans to invest in a software development project costing $2,80,000. The project will generate annual revenues of $90,000 for 5 years. The
An IT company plans to invest in a software development project costing $2,80,000. The project will generate annual revenues of $90,000 for 5 years. The company’s tax rate is 30%, and the cost of capital is 15%.
Requirements:
- Calculate the after-tax cash flows from the project.
- Determine the NPV of the project.
- Compute the IRR of the project.
- Assess the project’s profitability using the PI.
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Contemporary Engineering Economics
Authors: Chan S. Park
5th edition
136118488, 978-8120342095, 8120342097, 978-0136118480
