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:

• Profit & Loss Statement,
• Net Present Value (NPV) at 10% discount rate
• Payback Period
• IRR ( internal Rate of return) for the Project
• Compute the average profit rate for the Project life