Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help calculating the NPV at the bottom. Please show the work of the calculation and state if it should be accepted or not.
I need help calculating the NPV at the bottom. Please show the work of the calculation and state if it should be accepted or not. Thanks
\begin{tabular}{|l|l|lr|} & \multicolumn{1}{c|}{ A } & \multicolumn{2}{c|}{ B } \\ \hline 3 & & \multicolumn{2}{c|}{4} \\ \hline 4 & Economic life of project in years. & & 1,061,000.00 \\ \hline 5 & Price of New Equipment & $ & 188,810.00 \\ \hline 6 & Change in NWC & $ & 237,033.00 \\ \hline 7 & Fixed Costs & S & 13% \\ \hline 8 & Variable Costs (\% of Revenue) & & 156,966.00 \\ \hline 9 & Salvage value of New Equipment & $ & 35.0% \\ \hline 10 & Marginal Tax Rate & & 4400 \\ \hline 11 & First Year Unit Sales & & 19.00% \\ \hline 12 & Sales Growth Rate & & 80.00 \\ \hline 13 & Unit Sale Price & $ & $ \\ 14 & First Year Revenue & S & 352,000.00 \\ \hline \end{tabular} C Note Cells C21 and C22 include the initial (today's) cash flows. Column D through G are the operating cash flows. Spreadsheet for determining Cash Flows Cells G38-G40 contain the terminal cash flows. Timeline: Year 1 2 II. Net Investment Outlay = Initial CFs \begin{tabular}{|lr|} \hline$ & (1,061,000.00) \\ \hline$ & 188,810.00 \\ \hline \end{tabular} Price of Equipment III. Cash Flows from Operations Revenue Generation Change in NWC NPV of Project $ (265,856,11) Summarize Answers for NPV under three cases in area below \begin{tabular}{|l|c|c|c|c|} \hline & Sales Growth Rate & NPV & Accept? \\ \hline Best Case & 29.0% & & & \\ \hline Most Likely & 19.00% & & & \\ \hline Worst Case & 1.9% & & & \\ \hline \end{tabular}Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started