Question
The economic life of a project is estimated at five years. The project has been implemented at an investment of USD 1500000. The expected
The economic life of a project is estimated at five years. The project has been implemented at an investment of USD 1500000. The expected cash inflows (USD) for the first five years, that is, till the economic life is over are as below. First Year Second Year Third Year Fourth Year Fifth Year 415000 485000 500000 First Year Second Year Third Year Fourth Year Fifth Year 325000 125000 The net abandonment value or salvage value (USD) of the project for five years is given below. 1300000 680000 480000 160000 0 Make an analysis and ascertain when the project should be abandoned? Assume a cost of capital of 10% p.a.
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The Human Side of Organizations
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