Question - Cost is often an important aspect of a project.
Calculate the net present value of a software update project which requires an initial investment of $250,000 and is expected to generate cash inflow of $75,000 each month for years 1-6. Assume that the salvage value of the project is zero. The target rate of return is 8% per annum. Be sure to use time adjustments.
What is the payback period for the project?