Calculate the Expected Net Present Value arising out of the incremental cash flows for the investment. You should also comment on the potential impact of any risk factors attached to variable costs. In addition, related to your calculations, provide a view on the financial acceptability of the project .
At a Board meeting to discuss the proposals the following conversations were heard: Margaret Poulton, the Finance Director, said, “I think that we should calculate the Net Present Value of the project, in order to ascertain if it is worthwhile.” Samuel Komakech, the HR Director, responded to this as follows, “I have never understood NPV, […]