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# event_2_doc_key - Event 2 Life-Cycle Cash Flow Estimates...

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1 Event 2 Life-Cycle Cash Flow Estimates: Key Costs are assumed positive for the computations. Net incomes show as negative numbers (red numbers) on this page. Use 0% for the interest rate. Questions: In each case show the cash flow in each year and total profit. 1. When the price per job is \$1000, how much will profit will Pedro make over the life of the project. 2. What price must Pedro charge for each job to breakeven (have 0 profit) after five years? Use the Excel Solver to find your answer. Use Solver to find the breakeven price: \$681.54 0 1 2 3 4 5 Profit Cash Flow 10000 3140 3807 4533 20956 13369 0 3. Show the cumulative cash flow for the solution of problem 2. The cumulative cash flow is the sum of all cash flows from time 0. 0 1 2 3 4 5 Profit Cash Flow 10000 3140 3807 4533 20956 13369 0 Cumulative Cash Flow 10000 6860 3053 7586 13369 0 4. A cash flow problem exists if the cumulative cash flow for any year is negative. The cumulative cash flow is the sum of all cash flows from time 0. What price does Pedro have to charge per job, so that there is never a negative cumulative cash flow?

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event_2_doc_key - Event 2 Life-Cycle Cash Flow Estimates...

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