=

Estimate the break even point for Project A if the discount rate 7% is taken (see Table 1A2). Show your working in the space provided.

Break even point for Project A = ____________ (give at least one decimal place).

Working:

2 Year 3 3 4 A2) Project A: Refurbishment Discount Factor (at 7%) Expected Benefit Present Value (PV) of Benefits Expected Costs Present Value (PV) of Costs PV of Net Benefit Cumulative (NPV) Year 0 Year 1 Year 2 Year 4 1.000000_0.934579 0.8734390.816298 0.7628950.712986 S0 $50,000 $70,000$90,000 $80,000 $70,000 0 $46,729 $61,141$73,467$61,032$49,909 $50,000$30,000$40,000$50,000 $50,000$60,000 $50,000 $28,037 $34,938$40,815$38,145$42,779 $7,130 $90,000$31,308 $5,105$27,547$50,434$57,563 $50,000$18,692 $26,203$32,652$22,887