1. Discount Rate 9%
Assume project is completed in Year 4
Year 0 1 2 3 Total
Costs 200,000.00 30,000.00 30,000.00 30,000.00
Discount Factor 1.00 0.92 0.84 0.77
Discounted Costs 200,000.00 27,522.94 25,250.40 23,165.50 275,938.84
Benefits 0.00 100,000.00 100,000.00 100,000.00
Discount Factor 1.00 0.92 0.84 0.77
Discounted Benefits 0.00 91,743.12 84,168.00 77,218.35 253,129.47
Discounted Benefits - costs (200,000.00) 64,220.18 58,917.60 54,052.84 (22,809.37)
Cumulative Benefits - costs (200,000.00) (135,779.82) (76,862.22) (22,809.37)
ROI (0.08) <- Payback is longer than 4 years.
Based on the fina
200,000.00
I would not advance with
150,000.00
are devoted into this proj
100,000.00
two years or so, this proj
50,000.00 valuable investment. In t
Column B
0.00 Column C not receive any financial
(50,000.00) Column D years and investors woul
(100,000.00) Column E or more years. No return
(150,000.00) money. Not worth the fin
Column E
(200,000.00)
Row 5 Column C
Row 7
Row 9
Row 11
Row 13
Row 15

2. <- NPV
Based on the financial analysis of this project,
ould not advance with this plan. If the costs that
devoted into this project recovered within the first
o years or so, this project would be deem as a
uable investment. In this case, the project would
receive any financial recovery within the first two
ars and investors would actually lose money after 4
more years. No return on the investment = no
ney. Not worth the financial strain.