Cost of Capital Initial Capital Expense Years Cash Inflows (Sales) Present Value (PV) of Cash Inflows Cumulative Cash Flow 12% 275,000 1 2 3 4 5 185,000 185,000 185,000 185,000 185,000 165,179 147,481 131,679 117,571 104,974 165,179 312,659 444,339 561,910 666,884 Initial Investment 275,000 Cash Outflows (Expenses) 85,000 85,000 85,000 85,000 85,000 Present Value (PV) of Cash Outflows 275,000 75,893 67,761 60,501 54,019 48,231 275,000 350,893 418,654 479,156 533,175 581,406

Database System Concepts
7th Edition
ISBN:9780078022159
Author:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Publisher:Abraham Silberschatz Professor, Henry F. Korth, S. Sudarshan
Chapter1: Introduction
Section: Chapter Questions
Problem 1PE
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Based on the provided image:

  • Calculate the NPV
  • Calculate the return on investment.
  • Calculate the breakeven point.
  • Include a line chart to support your break even results

Please and thank you

 

Cost of Capital
Initial Capital Expense
Years
Cash Inflows (Sales)
Present Value (PV) of Cash Inflows
Cumulative Cash Flow
12%
275,000
1
2
3
4
5
185,000
185,000
185,000
185,000
185,000
165,179
147,481
131,679
117,571
104,974
165,179
312,659
444,339
561,910
666,884
Initial Investment
275,000
Cash Outflows (Expenses)
85,000
85,000
85,000
85,000
85,000
Present Value (PV) of Cash Outflows
275,000
75,893
67,761
60,501
54,019
48,231
275,000
350,893
418,654
479,156
533,175
581,406
Transcribed Image Text:Cost of Capital Initial Capital Expense Years Cash Inflows (Sales) Present Value (PV) of Cash Inflows Cumulative Cash Flow 12% 275,000 1 2 3 4 5 185,000 185,000 185,000 185,000 185,000 165,179 147,481 131,679 117,571 104,974 165,179 312,659 444,339 561,910 666,884 Initial Investment 275,000 Cash Outflows (Expenses) 85,000 85,000 85,000 85,000 85,000 Present Value (PV) of Cash Outflows 275,000 75,893 67,761 60,501 54,019 48,231 275,000 350,893 418,654 479,156 533,175 581,406
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