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Conduct an investment appraisal for a capital project with the following data: Category Year 1 ($) Year 2 ($) Year 3 ($) Year 4 ($)
Conduct an investment appraisal for a capital project with the following data:
Category | Year 1 ($) | Year 2 ($) | Year 3 ($) | Year 4 ($) | Year 5 ($) |
---|---|---|---|---|---|
Cash Inflows | 100,000 | 105,000 | 110,000 | 115,000 | 120,000 |
Cash Outflows | 200,000 |
Requirements:
- Calculate the net present value (NPV) of the investment using a discount rate of 40%.
- Determine the payback period for the investment.
- Present the NPV and payback period calculations in a table format.
- Discuss the investment's financial viability.
- Identify risk factors associated with the investment.
- Provide recommendations based on the investment appraisal results.
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