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Question: Using the 10% cost of capital, what is the project's NPV if it is operated for the full 3 years? Would the NPV change
Question: Using the 10% cost of capital, what is the project's NPV if it is operated for the full 3 years? Would the NPV change if the company planned to terminate the project at the end of Year 2? At the end of Year 1? What is the project's optimal (economic) life?
How do I calculate it in excel I know the answer but not how to get it.
Cost of Capital 10%
YearInitial Investment and Operating Cash Flows End-of-Year Net Salvage Value
0 $5,000 $5,000
1 2,100 3,100
2 2,000 2,000
3 1,750 0
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