Question: Consider projects cash flows with the salvage value. Determine the Physical like vs economic life NPVs and suggest the best time to end the project?

  1. Consider projects cash flows with the salvage value. Determine the Physical like vs economic life NPVs and suggest the best time to end the project? 10% cost of capital for the project

Year

Project CFs

Salvage Value

0 (NINV)

-100,000

100,000

1

$60,000

50,000

2

$70,000

$35,000

3

$80,000

$20,000

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