Question: Project B Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total Net Economic Benefit 0 85000 85000 85000 85000 85000 Discount

Project B

Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

Total

Net Economic Benefit

0

85000

85000

85000

85000

85000

Discount Rate (10%)

1.000

.9091

X

.7513

.6830

.6209

PV of Benefits

0

77274

70244

63861

58055

52777

NPV of all Benefits

0

77274

X

211378

269433

X

X

One-Time Costs

(75000)

Recurring Costs

0

(40000)

(40000)

(40000)

(40000)

(40000)

Discount Rate (10%)

1.000

.9091

X

.7513

.6830

.6209

PV of Recurring Costs

0

(36364)

(33056)

(30052)

(27320)

(24836)

NPV of all Costs

(75000)

X

(144420)

(174472)

(201792)

X

X

Overall NPV

X

Overall ROI

X

Break-even Analysis

Yearly NPV Cash Flow

(75000)

40910

37188

33809

30735

27941

Overall NPV cash Flow

(75000)

(34091)

3098

36906

67641

95582

Break-even fractions

X

Break-even occurs at

X years

What is the discount rate for year 2? ____________

What is the NPV of all costs for year 1? ____________________

What is the NPV of benefits for year 2? _________________

What is the NPV of benefits for year 5? _________________

What is the NPV of all costs in year 5? ___________________

What is the TOTAL NPV of benefits? __________________

What is the TOTAL NPV of all costs? ____________________

What is the OVERALL NPV? _________________________

What is the ROI? ____________________________________

When does the project break-even? _____________________

What is the break-even fraction? _______________________

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