A project has the following expected cashflows: Ă˘â‚¬Â˘ An initial investment of $250,000 at time zero Ă˘â‚¬Â˘ Annual revenues of $65,000 starting at the end of year 3 Ă˘â‚¬Â˘ 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. Ă˘â‚¬Â˘ A salvage value of $55,000 at the end of the projectĂ˘â‚¬â„˘s 10 year life Ă˘â‚¬Â˘ A MARR of 12% per annum
(a) Draw the cash flow diagram for the above cashflows
(b) What is the Present Worth of these cashflows at time zero?
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(c) What is the Annual Worth of these cashflows across the projectĂ˘â‚¬â„˘s useful life?
(d) What is the Future Worth of these cashflows at the end of the project?