Decision-Making with Relevant Costs at Intel

• Values:

• Cost of New Project: $5,000,000
• Expected Cash Inflows: $2,000,000 per year
• Project Life: 5 years
• Salvage Value: $1,000,000
• Requirements:

0. Calculate the net present value (NPV) of the new project for Intel.
1. Determine the internal rate of return (IRR) for the project.
2. Discuss how relevant costs and cash flows affect investment decisions at Intel.
3. Recommend whether Intel should undertake the new project based on NPV and IRR.