Solve the net present value for the project for company

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A company plans to invest in a new manufacturing project over the next 10 years. The project will require an initial investment of $60,000, and an additional investment of $14,000 in Year 5. Starting in year 2, the company will reduce their labour costs by $15,000 a year for the next 4 years and $9000 a year for the next 3 years. At the end of the project, there will be a residual value of $21,000.

Problem 1: If the companys cost of capital is 10%, calculate the net present value for this project.

Problem 2: Should the company undertake the project?

Reference no: EM132965882

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