Question
Evaluate the financial impact of a new digital transformation project at IBM using NPV, IRR, and payback period methods. Investment Components Initial Investment ($) Annual
Evaluate the financial impact of a new digital transformation project at IBM using NPV, IRR, and payback period methods.
Investment Components | Initial Investment ($) | Annual Cash Flows ($) | Project Life (years) | Discount Rate (%) |
Digital Transformation | 350,000,000 | 90,000,000 | 5 | 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 digital transformation costs.
Provide recommendations on whether to proceed with the digital transformation project.
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