Sales:

Year 1 Nil

Year 2 -$ 50,000

Year 3 -5 - $ 60,000

Costs:

Fixed cost: Year 1-5 $ 6,000

Variable cost : 20% of sales

Investment : $ 25,000

Depreciation: 10% of initial investment

Terminal Value of Investment: $ 10,000

Please prepare the Cash Flow Statement and estimate:

• IRR ( internal Rate of return) for the Project
• Net Present Value (NPV) at 10% discount rate