Cash flows except the initial cost are end of year cash flow

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Reference no: EM131049195

You are asked to determine the optimal economic life of the following project. It has an engineering or physical life of 4 years. The cost of capital is 8% and all cash flows except the initial cost are end of year cash flows.

Year Net operating cash flow Net terminal cash flow

0 (50,000)

1 20,000 35,000

2 15,000 25,000

3 10,000 15,000

4 5,000 5,000

Reference no: EM131049195

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