Generate a table that considers the following project.

The initial investment is for 1 million dollars. The useful life of the project is considered 7 year. Sixty percent of the initial investment will be financed with a bank loan, payable in 6 years, yearly payments of the same amount, at a rate of 10% per year. The depreciation method is MACRS, classified as a 5 year item. The tax rate is 35%. The positive cash flows start on the first year, with $250,000. It is expected that they will grow at a rate of 5% per year during the duration of the project. The salvage value of the investment is estimated at $100,000. The MARR selected for this project is 15%.

A) Compute the present value of the project under these parameters.

B) Compute a sensitivity analysis table of the present worth if two parameters at a time would change:

Financial amount (30%, 50%, 70%)

Interest rate (5%, 9%, 12%)

C) Which combination of financial amount yields the highest present worth.

Subject | Mathematics |

Due By (Pacific Time) | 05/01/2014 12:00 pm |

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