You are planning to build a new plant on31 De7cember 2007.The initial cost will be $7,978,000.further costs during the first year will be $546,000 with positive cash flows expected in the second, third and fourth years of $2,500,000 ,$4,000,000, and $5,700,000 respectively.
The fifth year onwards is expected to produce net cash inflows of $2,000,000, in perpetuity.
Assume all cash flows at the end of the years, except for the initial cost. Calculate the NPV of this project, assuming a cost of capital of 18%.
From India, Ludhiana
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