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

(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 project’s useful life?

(d) What is the Future Worth of these cashflows at the end of the project?

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