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Year Cash Flow ($) Additional Costs ($) Salvage Value ($) 0 -25,000 - - 1 8,000 1,000 - 2 10,000 1,000 - 3 12,000 1,000

Year

Cash Flow ($)

Additional Costs ($)

Salvage Value ($)

0

-25,000

-

-

1

8,000

1,000

-

2

10,000

1,000

-

3

12,000

1,000

-

4

14,000

1,000

-

5

16,000

1,000

3,000

Requirements:

  1. Compute the NPV with a 6% discount rate.
  2. Determine the IRR.
  3. Calculate the Payback Period.
  4. Assess the impact of additional costs on the project's profitability.
  5. Evaluate the effect of the salvage value on the NPV and overall project viability.

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