Question
Any Guidance on Formula Calculation on the following question? In order to sell your current and future projects, you will need to perform basic cost-benefit
Any Guidance on Formula Calculation on the following question?
In order to "sell" your current and future projects, you will need to perform basic cost-benefit analyses.
a)Calculate the net present value of a software update project which requires an initial investment of $900,000 (Year 0) and is expected to generate cash inflow of $500,000 each year for years 1-4. Assume that the salvage value of the project is zero. The target rate of return is 4% per annum. Be sure to use time adjustments.
b)During which year will the project achieve its payback period (accounting for time adjustments)?
c)What is the cost-benefit ratio?
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