Find the feasibility of the construction project below by finding the net present value. The project includes
Question:
Find the feasibility of the construction project below by finding the net present value. The project includes the purchase and installation of production equipment at the beginning of the first year at a value of $75,000, and an annual rent of $1000. Payment starts from the end of the first year, increases by $50 annually to become at the end of the second year $1050 and at the end of the third year 1100 and so on.. The project requires maintenance every 5 years at a cost $4000 starting from the end of the sixth year. The project generates an annual profit of $30000, the recoverable value of the equipment $5000. The useful life is 30 years, the annual interest is 40%, to be installed every three Months
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw