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The following are the new values to the data that you have been estimating up to this point: funds from bank at 3%.

The following are the new values to the data that you have been estimating up to this point:

  • funds from bank at 3%.
  • initial cost $105,000
  • gross revenues from the project will be $25,000 for year 1, then $27,000 for years 2 - 4. Year 5 will be $23,000.
  • The expected annual cash outflows (current project costs) are estimated at being $13,000 for the first year, then $12,000 for years 2, 3, and 4. The final year costs will be $10,000.
  • After 5 years the equipment will stop working and will be worthless.
  • The discount rate continues to be 6%.

Calculate the net present value, and determine whether the project is worth doing from a financial perspective.

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