Question - A modification to an ERP project is expected to cost $50,000. The benefits are shown for each of the first four years.
|
Year
|
1
|
2
|
3
|
4
|
|
Cash Flow
|
(5,000)
|
50,000
|
50,000
|
(25,000)
|
1. What is the NPV of the project if the required return is 14%?
2. What is the NPV of the project if the required return is 12% and the inflation is currently expected to be steady at 5% for the life of the project?