Decision-Making with Relevant Costs at Google

• Values:
  • Initial Investment: $5,000,000
  • Annual Cash Inflows: $1,200,000
  • Project Life: 7 years
  • Discount Rate: 10%

• Requirements:
  1. Calculate the NPV of the project for Google.
  2. Determine the IRR and payback period.
  3. Explain how relevant costs influence investment decisions.
  4. Suggest whether Google should proceed with the project.