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Ford evaluates a capital investment project. In January 2044, the following data is provided: Initial Investment: $5,000,000 Annual Cash Flows: $1,200,000 Project Life: 5 years

Ford evaluates a capital investment project. In January 2044, the following data is provided:

  • Initial Investment: $5,000,000
  • Annual Cash Flows: $1,200,000
  • Project Life: 5 years
  • Discount Rate: 10%

Requirements:

  • Calculate the net present value (NPV) of the investment.
  • Perform a sensitivity analysis on cash flows and discount rates.
  • Prepare a recommendation report.
  • Discuss the risks and uncertainties associated with the investment.

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