5-34. Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,250,000 if purchased today and will generate the following cash disbursements and receipts. Should Duncombe pursue the investment if the cost of capital is 8 percent? Why?

Year 1 2 3 4

Cash Receipts 950,000 925,000 800,000 675,000

Cash Disbursements 500,000 475000 450000 430000

Net Cash Flow 450000 450000 350000 245000

please give a response in Excel.

(NPV Problem)

INPUT DATA Rate = 8%

Year 0 1 2 3 4

Cash Inflows

Cash Outflows

Net Cash Flow

Present Value

PV = =PV(rate,nper,pmt,fv,type)

NPV = = NPV(rate,value1,value2,)-Initial Outlay

PV of Net Cash Flows (NPV Formula)

Less: Initial Cash Outlay

NPV

NPV from Sum of Annual PV's