Assume the following facts:• A project will cost $45,000 to develop.• When the system becomes operational after a one-year development period, operational costs willbe $9,000 during each year of the system’s five-year useful life.• The system will produce benefits of $30,000 in the first year of operation, and this figure willincrease by a compound 10% each year.what is the NPV for this project?
Assume the following facts:• A project will cost $45,000 to develop.• When the system becomes operational after a one-year development period, operational costs willbe $9,000 during each year of the system’s five-year useful life.• The system will produce benefits of $30,000 in the first year of operation, and this figure willincrease by a compound 10% each year.what is the NPV for this project?
Chapter9: Capital Budgeting Techniques
Section: Chapter Questions
Problem 11PROB
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Assume the following facts:
• A project will cost $45,000 to develop.
• When the system becomes operational after a one-year development period, operational costs will
be $9,000 during each year of the system’s five-year useful life.
• The system will produce benefits of $30,000 in the first year of operation, and this figure will
increase by a compound 10% each year.
what is the NPV for this project?
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