Question

I need just the cash flow please

Your company is considering a project which requires an initial investment of $50,000. The equipment has a useful life of six years and you believe the salvage value will be $12000. The project will generate $8000 net income each year for six years. There will be a single mainte- nance expense of $6000 in the third year. Using the present worth method, determine if the project is economically satisfactory. The MARR is 10%. Draw a cash flow diagram for each problem involving cash flows.

NPW of the project = -50000 + 12000 * (P/F,10%,6) + 8000 * (P/A,10%,6) - 6000 * (P/F,10%,3)

= -50000 + 12000 *0.564474 + 8000 *4.355261 - 6000 *0.751315

= -12892.11

As NPW is negative, this project should not be selected

Answer 1

Cash flow Table

	Initial cost	Annual revenue	Maint Cost	Salvage
0	-50,000.00
1		8,000.00
2		8,000.00
3		8,000.00	-6,000.00
4		8,000.00
5		8,000.00
6		8,000.00		12,000.00

Cash flow diagram