Which one of the following methods of project

analysis is most suitable for short-term returns?

In appraising a € 300,000

investment project, a firm uses a discount rate of 5%. The project will produce

an income(net of operating costs) of € 75,000 per year, over a five year

period. At the end of the five years, the firm expects to sell the equipment

for € 10,000 at the end of year 5.

You are analysing a proposed project and have

compiled the following information in relation to annual returns:

                                      Year  Cash flow

                                        0    -€145,000

                                        1      € 33,400

                                        2      € 70,500

                                        3      € 82,100

ABC Company is

considering investing in a new project. The project will need an initial

investment of

A

project has an initial cost of €100,000 and annual returns of €12,500. At the

end of its 8-year useful life, its salvage value is €30,000. At a 10% interest

rate, the net present worth of the project is approximately. (Answers are rounded to the closest whole number).

If the net present value is greater than zero

one should: