Draw the cash flow diagram for this project

Reference no: EM131900167

Problem

Equipment is bought for an initial cost of $20,000. Its operation will result in a net income of $6,000/Yr for the first year, increasing by $1,000 each year after year 1. At the end of the fifth year, the equipment is sold for $5,000. The prevailing interest rate for the next five years is estimated at 10%.

a. Draw the cash flow diagram for this project.

b. Calculate the NPW.

Reference no: EM131900167

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