Question
Can you help me with this in excel too, thank you. 7.. If farm land is currently worth $4,750 per acre and is expected to
Can you help me with this in excel too, thank you.
7.. If farm land is currently worth $4,750 per acre and is expected to increase in value at a rate of 5 percent annually, a) what will it be worth in 5 years? B) In 10 years?
8. Clark Industries is interested in buying a new machine which will increase production annually for the next five years, resulting in extra sales revenue (positive cash flow) for each year. The following are the projected cash flows: Initial Cost, Year 0: $468,000 Positive Cash flows: next five years: $110,000 per year Use the PV function to calculate the present value of these cash flows using a ten percent discount) rate.
b. Rather than dispose of the machine at the end of five years, the companys revised plan is to sell it to a scrap dealer for $55,000. Determine the present value of the revised plan using the NPV function.
9. Jackson Industries has a project with the following projected cash flows: Initial Cost, Year 0: $240,000 Positive Cash flow year one: $25,000 Positive Cash flow year two: $75,000 Positive Cash flow year three: $150,000 Positive Cash flow year four: $150,000 a. Using a 10% discount rate for this project, calculate the NPV. b. Calculate the IRR for this project.
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