You are the head of LA Port Authority debating an expansion to accept 10% more...
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Accounting
You are the head of LA Port Authority debating an expansion to accept 10% more cargo per day. The expansion will cost $50,000,000 and result in annual cost savings of $2,000,000 alongside revenues of $8,000,000. The expansion will operate for ten years before needing replacement. You can currently obtain subsidized funding from the FTA at 3.5%.
Based on the NPV rule, should you pursue the project?
Based on the IRR rule, should you pursue the project?
If your CEO requires a payback of <5 years, should you pursue the project?
Should you pursue the project if your CEO requires a discounted payback of <5 years?
Should you accept the project based on the profitability index?
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