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3. Your boss has suggested that, instead of a savings of $37,000 annually, it makes more sense to expect a savings that
Posted: Wed Mar 09, 2022 8:28 am
by answerhappygod
- 3 Your Boss Has Suggested That Instead Of A Savings Of 37 000 Annually It Makes More Sense To Expect A Savings That 1 (23.16 KiB) Viewed 39 times
3. Your boss has suggested that, instead of a savings of $37,000 annually, it makes more sense to expect a savings that starts at $20,000 in year 3 and rises $1500 per year to an end value in year 12 of $38,000. She bases her suggestion on the fact that the experience curve will gradually reduce production costs. What would be the NPV of the cash flow if you adopt her suggestion? 4. You have developed an innovative new project that is estimated to produce an annual revenue stream (money in) of $15,000 per year for the next 10 years. Your current corporate cost of Money is 4%. However, in four years, your CFO projects that rate will rise to 6% for the remaining six years of the project's lifespan. What is the NPV of this money in cashflow today? (we are ignoring any money out costs)