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Use the below table to answer the following questions: 1. Compute the Net Present Value (NPV). (2 Marks) 2. Show when the Payback year
Use the below table to answer the following questions: 1. Compute the Net Present Value (NPV). (2 Marks) 2. Show when the Payback year will occur and justify your answer. (2 Marks) 3. Compute the ROI. (3 Marks) 4. Will you advise the Company to invest in this project and why? (2 Mark) Discount rate Costs Discount factor Discounted costs Benefits Discount factor Discounted benefits 11.00% - 0 22,500 1.00 22,500 0 1.00 0 Year 1 0 0.90 0 2 0 0.81 0 9500 0.90 31 0 0.73 0 Discounted benefits costs (22,500) 8,550 6,480 4,380 Cumulative benefits costs (22,500) (13,950) (7,470) (3,090) 4 Total 0.66 8000 6000 5500 0.81 0.73 0.66 8,550 6,480 4,380 3,630 23,040 0 22,500 3,630 540 540
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