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Yr CF Salvage 0 ($69,000) $69,000 1 31,200 48,000 2 35,400 19,000 3 52,750 0 Using the 13% cost of capital, what is the projects
Yr | CF | Salvage |
0 | ($69,000) | $69,000 |
1 | 31,200 | 48,000 |
2 | 35,400 | 19,000 |
3 | 52,750 | 0 |
Using the 13% cost of capital, what is the projects NPV if it is operated for the full 3 years? Would the NPV change if the company planned to terminate the project at the end of Year 2? At the end of Year 1? What is the projects optimal (economic) life?
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