Consider a project to supply your church with 55,000 gallons of hand sanitizer annually for church services.
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Question:
Consider a project to supply your church with 55,000 gallons of hand sanitizer annually for church services. You estimate that you will need an initial Gh4,200,000 in terms of investment to get the project started. The project will last for 5 years. The project will bring in annual cash flows of Gh1,375,000. It also estimates a salvage value of Gh300,000 after dismantling costs. Your cost of capital is 13 percent. Assume no taxes or depreciation. Required: What is theNPV of the sanitizer project? Should you pursue this project?
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