You are trying to help your boss decide if you should start a new product line over the next 12 years.
The equipment to make this new product will have an initial cost of $351,000 to the company.
At the end of the project, you believe you can get $45,000 for the equipment as salvage.
Supplies will cost $3150 the first year and go up by $820 each year.
Maintenance costs start at $1800 the first year and will increase by 1.6% each year
The company expects to make $39100 the first year and this will increase by 3.1% each year.
Create the Cash flow table showing these costs and profits and the net cash flow.
If the interest rate is 3.6%, what will be the NPV of the project?
Is this project making or losing money? What should we recommend to our boss? (Do or don't do this project)