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  • Net Economic Benefits (Discount Rate 12%) Year Benefits

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    Raghad Meow
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    This document analyzes the net present value and break even point of a project with recurring annual benefits of $50,000 and one-time and recurring annual costs. It finds that the project has a positive net present value of $35,003 and breaks even between years 2 and 3, with a break even fraction of 0.403. The overall return on investment is 0.24.

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    NPV Analysis

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    This document analyzes the net present value and break even point of a project with recurring annual benefits of $50,000 and one-time and recurring annual costs. It finds that the project has a positive net present value of $35,003 and breaks even between years 2 and 3, with a break even fraction of 0.403. The overall return on investment is 0.24.

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    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    25 views2 pages

    Net Economic Benefits (Discount Rate 12%) Year Benefits

    Uploaded by

    Raghad Meow
    This document analyzes the net present value and break even point of a project with recurring annual benefits of $50,000 and one-time and recurring annual costs. It finds that the project has a positive net present value of $35,003 and breaks even between years 2 and 3, with a break even fraction of 0.403. The overall return on investment is 0.24.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
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    of 2

    Net Economic Benefits (Discount Rate 12%)

    Year Benefits
    0 0
    1 50000
    2 50000
    3 50000
    4 50000
    5 50000

    One Time Cost -42500


    Recurring Costs (Discount Rate 12%) Costs
    0 0
    1 -28500
    2 -28500
    3 -28500
    4 -28500
    5 -28500

    Overall NPV

    Overall ROI - (Overall NPV/NPV of all Costs )

    Break Even Analysis


    Year Yearly NPV Cash Flow
    0 -42500
    1 19196
    2 17140
    3 15303
    4 13664
    5 12200

    Project break even ocuurs between years 2 and 3


    Use the first year of positive cash flow to calculate the break even fraction 0.403
    PV of Benefits NPV of all Benefits
    0 0
    44643 44643
    39860 84503
    35589 120092
    31776 151867
    28371 180239 180239

    PV of Costs NPV of all Costs


    0 -42500
    -25446 -67946
    -22720 -90666
    -20286 -110952
    -18112 -129064
    -16172 -145236 -145236

    35003

    0.24

    Overall NPV Cash Flow


    -42500
    -23304
    -6164
    9139
    22803
    35003

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