Question

Suppose an investment project is projected to provide $198,000 in revenues if the project is undertaken. the investment will cost the company $180,000. given this information, one should commit to the project:

Answer 1

Yes. By investing $180,000 and having a revenues of $198,000, the company would earn $18,000 (before tax) from this project investment. Assuming that the $180,000 investment already factored in time/labor and the projected $190,000 revenues is very likely to occur.