Question: This question is based on the following cash flows C 0 =$10,000 I 1 =$2,000 I 2 =$2,000 I 3 =$3,000 I 4 =$3,000 I

This question is based on the following cash flows

C0=$10,000 I1=$2,000 I2=$2,000 I3=$3,000 I4=$3,000 I5=$2,500 L=$1,000
0 1 2 3 4 5

C: Cost, I: Income, L: Salvage

The escalation rate is 10% per year in this example.

Calculate the NPV of this investment assuming an escalated dollar minimum rate of return of 8%

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