Students will perform economic analysis using net present value method and payback period. The project will enhance students' understanding of process of doing engineering economic analysis of alternatives. Students will apply concept of MARR, net present worth and payback period. 1. Description of Project You plan to start a business with a stated capital. Your investment is limited to $200,000. You will operate the business for 12 years. After comprehensive market research, and assessment of the local and global economy, political situatition and business risk, you shall propose a business idea. You will conduct a business analysis of the financial viability. State the results of your analysis based on NPW and Payback Period. You will state your decision of starting the business using Net Present Worth criterion and payback period. 2. Requirements: You are required to provide the following before carrying out analysis: Describe the nature of the proposed business. You will evaluate and assess all the cash flows basing on the yearly returns. Your investment is limited to $200,000. Estimate the salvage value for the business if any. Determine your MARR and justify MARR. Show detail cash flows (revenues and expenses) over a 12-year period. Examples of cash inflows are: sales revenue, salvage value, loan from bank. Examples of cash outflows are: rental expenses, salaries expenses, interest expenses, transportation expenses, payments for bank loan, insurance premium and etc. Determine the net monthly cash flow (receipts minus expenses). Do not include depreciations in expenses. You need to estimate net yearly cash inflows and net yearly cash outflows. 3. What need to be submitted? i. Microsoft Word report with declaration page providing the description of the businesses ii. EXCEL Spreadsheet of the business analysis. For each business, list all items of receipts and expenses and net cash flows. Txample of Year 1 for each month (Jan - Dec) net cash flows. Example of Yearly net cash flows. 4. Assessment Criteria The assessment criteria of the project include the followings. - Content page - Description of each business. - Detail estimations of reaxly cash flows for the business. - Cash flow diagrams for each business. - Selection of your MARR. Justify and explain how you decide your MARR