Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $255,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $46,800 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $259,000, will have a total useful life of 11 years (including the year just completed), and will produce net annual cash flows of $39,300 per year. Click here to view PV table. Evaluate the success of the project. Assume a discount rate of 10%.

Original estimate net present value

Revised estimate net present value