Solution-Contemplating a business venture

Contemplating a business venture

Reference no: EM132443349

You are contemplating a business venture, which involves an initial equipment purchase of $150,000. You want to analyze the venture over a project life of 5 years. MARR = 12%. The venture will result in revenue of $110,000 in the first year and increasing at 4% per year. The operating expenses are estimated to be $70,000 in the first year and decreasing at 2% per year. At the end of five years you will sell the business for $20,000. Do the analysis using Before Tax Cash Flows (Ignore taxes). Compute a) The Net Present worth, b) The Profitability Index. c) IRR d) DPB. Is the project acceptable?

Reference no: EM132443349

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Contemplating a business venture

Reference no: EM132443349

Reference no: EM132443349

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