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