A company is preparing to invest in a 21-year project. The initial outlay for the project will
Question:
A company is preparing to invest in a 21-year project. The initial outlay for the project will be €400,000 and there will be a further outlay of €150,000 after 10 months, both of which will be financed by borrowing at an effective rate of interest 5.7% per annum. In four years' time, the company expects that the project will begin to generate income at a rate of €110,000 per annum payable continuously until the end of the project and to incur expenses at a rate of €20,000 per annum payable continuously until the end of year 17. At the end of the project, there will be decomissioning expenses of €60,000.
Compute the discounted payback period for the project.
Managing Supply Chain and Operations An Integrative Approach
ISBN: 978-0132832403
1st edition
Authors: Thomas Foster, Scott E. Sampson, Cynthia Wallin, Scott W Webb