Solution-Compute the net annual cash inflow from project

Compute the net annual cash inflow from project

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Reference no: EM132775635

ABC Company is studying a project that would have a five year life and require a $1,600,000 investment in equipment. At the end of five years, the project would terminate and the equipment would have no value left over. The project would provide net income each year as follows: Sales 3,000,000 Less COGS 500,000 Gross Margin 2,500,000 Less: Operating Expenses Advertising, Salaries and other fixed 1,200,000 Salary Expense 1,100,000 Amortization 100,000 Total Expenses 2,400,000 Net Income 100,000 The company's discount rate is 18%

Problem 1) compute the net annual cash inflow from project

Problem 2) compute the net present value of the project. Is it acceptable?

Reference no: EM132775635

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Compute the net annual cash inflow from project

Reference no: EM132775635

Reference no: EM132775635

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