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You have spent $45,000 researching a project. Your research suggests that the project will occupy half of your current office space, which is currently unused,
You have spent $45,000 researching a project. Your research suggests that the project will occupy half of your current office space, which is currently unused, but could be rented out for $6,000 per month. The project will also require you to add a member to your IT team, whose salary is expected to be $5,000 per month. Excluding the costs mentioned above you expect the project to generate $9,000 a month in profits. Discuss each of these costs and the extent they should be considered in the NPV decision.
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