B Question 17 Koda Agriculture is doing a CBA (cost benefit analysis) on a investment project renewing the machinery used on the farm. The old machinery is sold in the beginning of the project for 33.000 euro. The investment must have positive NPV (net present value) within 5 years. In the end of the period (5 years) the planned reselling value (scrap value) of the equipment is 100.000 euro. The rates used are 8% and inflation is estimated to be 3% a year. List of cost items and benefit items are listed below: What is the NPV? Total New equipment Initial investment Quantity Cost/item (C) tractors 31- 50.000 conveyor belt 1 - 25.000 threshing machine 2 - 7.000 grain separator 2 - 19.000 irrigation system 1- 60.000 Benefits/year () improved yield 23.000 better products 25.000 labor cost reduction 23.000 1- Cost per year operation cost facility cost insurance cost Quantity Cost/item 6.000 1 - 3.000 12 - 700