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Is this correct? Year 0 1 2 3 4 NPV Commodity A CF Discounted CF -90,000 -90,000 30,000 26,087 40,000 30,246 50,000 32,876 60,000 34,305
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Year 0 1 2 3 4 NPV Commodity A CF Discounted CF -90,000 -90,000 30,000 26,087 40,000 30,246 50,000 32,876 60,000 34,305 33,514 Commodity B CF Discounted CF -90,000 -90,000 30,000 26,087 30,000 22,684 30,000 19,725 20,000 11,435 -10,068 Question 3.a. Complete the table above to calculate NPV for commodity A and B without using NPV function. Assume a discount rate of 15%. Question 3.b. Use NPV function to calculate net present values for commodity A in Cell N23 for commodity B in Cell N25. Assume a discount rate of 15%. NPV for A 33,514 NPV for B -10,068 Question 3.c. Based on your NPV calculation, which commodity would you produce and why? Answer 3.c. The commodity to produce would be commodity A. As Commoity B is giving a lower present value of $10,068 compared to commoidty A which is 33,514Step by Step Solution
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