Hi all, I am a newbie concerning economics so I would like to ask a few questions. The problem is the following: Consider you are having a plant and it gives you every year a positive cash flow of 1.000 euros. The plant is already installed. Then, you have the chance to install an extra system that will increase the revenue. Of course the extra system has a cost to implement and a cost to operate. Which is the most suitable method to evaluate the feasibility of the project? From a small search I found many methods like "simple return", "net present value" etc. but I am not sure which one is suitable. If I use the net present value then which rate of return should I use? Imagine we know in advance how much would be the revenue with and without the extra system, and its initial cost and operational cost. Thank you I did not find the right solution from the internet References : http://www.debate.org/forums/economics/topic/65658/ animated corporate promotional video
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