How solve the net present value of the project

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Reference no: EM132591059

An investor is considering an investment in a copper mine. The following information is available:

A. Equipment costing $300,000 will be required immediately. The equipment will be straight line depreciated over 3 years, and has no salvage value.

B. There is also an immediate need for $50,000 for fuel inventory that needs to be maintained at all times.

C. The investment will generate an annual accounting profit of $80,000.

D. At the end of year 3, there are required environmental clean up costs of $60,000

E. The investor is also considering a similar investment that will generate a return of 14%.

REQUIRED:

Question 1: Calculate the Net Present Value of this project

Question 2: Calculate the Payback period of this project

Reference no: EM132591059

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