Assume an interest rate of 5% c.m for the NPV calculation.

Outgoing funds: (Expenses)

1) Re-Paying back the face value of a $1,000,000 bond repayable 1 year from the start of the

project

2) Paying interest coupons quarterly at 4% c.q

3) Salaries of staff of $12,000 payable each Month

4) Office expenses of $8,000 payable each Month

5) Loan payments on a loan of $200,000 at 2% c.q. paid quarterly to be repaid in full in 1 years

6) Initial start up expenses for building and equipment of $300,000

Incoming Funds (Revenues)

1) $1,000,000 bond from investors (referred to it 1) above)

2) $200,000 loan from bank (referred to in 5) above)

3) Revenue from product at $40,000 each month for 1 year

1) A detailed time line of all of the Outgoing funds and Incoming Funds. Use different Colors or

styles to distinguish them (Or use outgoing above the line and Incoming below the line). Make

Time line readable. Show every month and quarter and yearly values clearly. Use landscape

orientation to allow for more room. You make use ... notation where repetitions occur

There are 9 Funds in all (6 outgoing 3 incoming). Each properly labelled Fund on time Line

. Funds must be clearly labelled showing all relevant Dates. Annuities must be clearly

labelled and show individual payments. Use arrows to indicate where funds are being valued.

2) Determine the Net Present Value of the Project at time 5% c.m for this valuation.

Show details of the fund. Show the value as Incoming funds minus the outgoing funds using

present values of all. Show complete details of all calculations. On a separate page from the

detailed timeline, clearly Show the value of each fund and the corresponding Equation detailing than the value of the fund is determined. Make sure to use each fund and value represented on a timeline with an equation. Make sure to compute the overall value of the incoming

and outgoing funds. Also Show equations relating to these totals.

3)COMMENT on the value of the project from a financial point of view.