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A project has the following expected cashflows: • An initial investment of $250,000 at time zero • Annual revenues of $65,000 starting at the end of year 3 • Annual expenses of $20,000 starting at the end of year 3. These expenses are expected to increase by 3% per year until the end of year 7, after which they will remain constant. • A salvage value of $55,000 at the end of the project’s 10 year life • A MARR of 12% per annum
(a) Draw the cash flow diagram for the above cashflows
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Order Paper Now(b) What is the Present Worth of these cashflows at time zero?
(c) What is the Annual Worth of these cashflows across the project’s useful life?
(d) What is the Future Worth of these cashflows at the end of the project?
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