Question

Draw a 5-year cash flow diagram representing the following cash flows to build springs: (Chapter 2)...

Draw a 5-year cash flow diagram representing the following cash flows to build springs: (Chapter 2) a. Initial investment in plant and equipment $50K b. Annual maintenance: $3K after year 1 and increasing $1K per year after that c. Annual production costs – $10K/year d. Annual revenue - $25K/year

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Answer #1

Cash Flow table

investment Annual Revenue Annual Maint. Cost Annual Production Cost
0 -50,000.00
1 25,000.00 -3,000.00 -10,000.00
2 25,000.00 -4,000.00 -10,000.00
3 25,000.00 -5,000.00 -10,000.00
4 25,000.00 -6,000.00 -10,000.00
5 25,000.00 -7,000.00

-10,000.00

Cash Flow diagram

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