Question
Please help out Northern Distributors expects a 17% rate of return on their investments. They are considering a 15 year project which will cost them
Please help out
Northern Distributors expects a 17% rate of return on their investments. They are considering a 15 year project which will cost them $100,000 immediately, $10,000 at the end of each year for the first five years, $20,000 at the end of each year for the next five years, and $25,000 at the end of each year for the last 5 years of the project. Should they take on the project if it will return $30,000 at the end of each year for the first 3 years, $40,000 at the end of each year in the next 4 years, and $60,000 at the end of each year for the last 8 years?
1) Determine the payback period of the project
2) Calculate the NPV of the project?
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