Question
Evaluate a new data analytics project at Alphabet Inc. using NPV, IRR, and payback period methods. Investment Components Initial Investment ($) Annual Cash Flows ($)
Evaluate a new data analytics project at Alphabet Inc. using NPV, IRR, and payback period methods.
Investment Components | Initial Investment ($) | Annual Cash Flows ($) | Project Life (years) | Discount Rate (%) |
Data Analytics Project | 120,000,000 | 40,000,000 | 4 | 6% |
Requirements:
Calculate NPV and IRR based on projected cash flows and discount rate.
Determine the payback period for the investment.
Conduct a sensitivity analysis to assess the impact of changes in data processing costs.
Provide recommendations on whether to proceed with the data analytics project.
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