The following estimated cash flows are associated with a project
maintenance costs Clean up costs, for each of the projects final three years 17.0 2.75 15 ” src=”https://files.transtutors.com/cdn/questions/transtutors006/images/transtutors006_ec98135e-273d-40b8-9b79-1acfd07cb202.png”>
The targeted Net Present Value for the project is $5,000,000 at
a discount rate of 8%.
(a) What should be the annual revenue flow for the project,
assuming a constant annual revenue stream. The estimated economic
life of the project is 10 years
(b) Draw a cash flow diagram of the project proposal.
Cashflow Initial investment cost Annual operation and maintenance costs Clean up costs, for each of the project’s final three years 17.0 2.75 15