he following information relates to a capital project that will last for five years (dollars are...
he following information relates to a capital project that will last for five years (dollars are in thousands). The discount rate is 10%. (Round all numbers to whole numbers.) Purchase of land and building ($2,450) Training of staff ($50) Annual cash inflow from new facility $2,100 Annual cash outflow from new facility ($1,800) Salvage value of facility in five years $500. what is the initial outflow? What is the annual net inflow - please show work
Homework Answers
1. Initial Cash outlay = Purchase cost + Training of staff
=2450+50
=2500
2. Annual net inflow
Years 1 to 4 =Annual cash inflow - Annual cash outflow
=2100-1800
=300
Year 5 =( Annual cash inflow - Annual cash outflow ) + Salvage value
=300+500
=800
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