Sales: Year 1 Nil

Year 2 $ 40,000

Year 3 -5 $ 50,000

Costs:

Fixed cost Year 1-5 $ 5,000

Variable cost 20% of sales

Investment $ 25,000

Terminal Value of Investment $ 10,000

Depreciation 10% of initial investment

Please prepare the Cash Flow Statement and estimate

1. compute the average profit rate for the Project life
2. Internal Rate of Return for the Project.
3. Payback Period
4. Profit & Loss Statement
5. Net Present Value (NPV) at 10% discount rate