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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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