Task: Use the following cash flow for the problem:
i) In year 0 you paid $50000 for a machine
ii) In years 1 through 5 you made $10000 per year from the machine
iii) In year 3 you had to pay an additional $10000 to keep the machine going
iv) In year 5 you sold the machine for $20000
Q1. Draw the cash flow diagram for this problem.
Q2. Calculate the Present Worth (PW) at 10% interest.
Q3. Calculate the Future Worth (FW) at 10% interest.
Q4. Calculate the Annual Worth (AW) at 10% interest.
Q5. What is the payback period?
Q6. Does the payback period and the PW, FW, and AW make sense?
Q7. Is this a viable project?