Post-audit of a project

Quillen Company is performing a post-audit of a project completed one year ago. The initial estimates were that the projects would cost $250,000, would have a useful life of 9 years, zero salvage value, and would result in next annual cash flows of $46,000 per year. Now that the investment has been in operations for 1 year, revised figures indicate that is actually cost $260,000 will have a total useful life of 11 years, and will produce-net annual cash flows of $39,000 per year. Evaluate the success of the project. Assume a discount rate of 10%. Initial estimate Cash out flow Discounted cash inflow Net present value -250000264915.1014915 After 1 year in operation Cash out flow Discounted cash inflow Net present value -260000253307-6693…