Question
Evaluate the financial impact of a new logistics system at FedEx using NPV, IRR, and payback period methods. Investment Components Initial Investment ($) Annual Cash
Evaluate the financial impact of a new logistics system at FedEx using NPV, IRR, and payback period methods.
Investment Components | Initial Investment ($) | Annual Cash Flows ($) | Project Life (years) | Discount Rate (%) |
Logistics System | 400,000,000 | 100,000,000 | 6 | 7% |
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 logistics system costs.
Provide recommendations on whether to proceed with the logistics system.
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