Evaluating a project in erewhon

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Reference no: EM132466309

Butler International Limited is evaluating a project in Erewhon. The project will create the following cash flows:

Year Cash Flow 0 -$ 132,000 1 495,000 2 560,000 3 455,000 4 410,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The re investment rate for these funds is 3 percent.

Reference no: EM132466309

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