Question
Can you please help. Based on the information I am providing below, I have to fill in the below spreadsheet. Can you please help in
Can you please help. Based on the information I am providing below, I have to fill in the below spreadsheet. Can you please help in telling me how to calculate. I would greatly appreciate it.
Financial Option 1: Purchase a $10 Million Building Rationale for investment: The business is considering environmental, social, and corporate governance (ESG) factors as part of its investment in a new building for its headquarters. The building itself will be a Leadership in Energy and Environmental Design (LEED)-certified building. However, the new site currently has a large, inactive gas station that sold both gasoline and diesel fuel. The new site also has a large repair facility that was used for deliveries and tractor-trailer trucks for more than 50 years. Some restoration was performed on the site, but the previous owner ran out of funds before they could bring the site up to LEED standards. Four large fuel tanks remain on the site, and they will also need to be addressed per LEED standards. Assumptions to consider:
$10 million cash purchase
Building generates additional net profits after tax of $1.25 million per year
20 year expected useful life of building
Salvage value: $1.5 million
Discount rate is 10%
*Based on the above information I have to fill out this sheet below and show how I obtained the answers.
Net Present Value (NPV) Calculator Building \begin{tabular}{|l|l|} \hline & \\ \hline Initial Investment & \\ \hline Annual Cash Inflows & \\ \hline Discount Rate & \\ \hline Number of Years & \\ \hline Salvage Value & \\ \hline \end{tabular} NPV=$ \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|} \hline Year & 1 & 2 & 3 & 4 & 5 & 6 & 7 & 8 & 9 & 10 \\ \hline \begin{tabular}{|l|l|} Cash Flows \\ \end{tabular} & $0 & $0 & so & so & so & so & $0 & $0 & $0 & $0 \\ \hline Year & 11 & 12 & 13 & 14 & 15 & 16 & 17 & 18 & 19 & 20 \\ \hline Cash Flows & $0 & $0 & $0 & $0 & $0 & 0 & so & so & so & $0 \\ \hline \end{tabular}Step by Step Solution
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