Need a help. I calculated the npv of both options that

BTWpls useall the information provided in order to make the correct decision in regards to which DCF method to use.thx a lot

Analysis of Harvesters Assumptions All cash flows are assumed to occur at the end of each year, except for capital outlays which occur at the beginning of the year. General Information on Vineyard Size of vineyard (ha) Current production of grapes per hectare (kg) per annum Juice yield per 1000 kg of grapes (lt) Current juice yield (lt of wine) Wholesale price per litre of wine in 1st year Price inflator for wholesale price (applied from 2nd year) Variable costs per kg of grapes production Fixed costs per hectare $ $ 58 5,000 640 185,600 5.00 2.25% $1.75 9,750.00 Option A: SELF-PROPELLING HARVESTER Capital expenditure Life of harvester (years) Increase in productivity Decrease in variable costs Depreciation method Salvage Value This machine requires a overhaul every 3 years, expensed immediately for tax purposses (excluding the last year of operation) $ 560,000.00 15 11.50% 5.00% SL $ 50,000.00 $ 95,000.00 Option B: TOW-BEHIND HARVESTER Capital expenditure Life of harvester (years) Increase in productivity Decrease in variable costs Depreciation method Salvage Value This machine requires a overhaul every 5 years, expensed immediately for tax purposes (excluding the last year of operation) Information Pertinent to Both Options Additional working capital required (WC is recovered at the end of the life of the harvesters) $ 425,000.00 10 9.50% 3.00% SL $ 65,000.00 $ 50,000.00 $ - Company tax (paid in the same year of income) 30% Discount rate 12% EFB210: FINANCE 1, 2016 S3 Capital Budgeting Report and Analysis ___________________________________________________________________________________ General Information Marks: 25 Weight: 25% Format: Report and Analysis Due: 23 January 2017 Submission: Submit report AND Excel analysis file by uploading your file to the Finance 1 Assignment portal in Blackboard, or When saving the Excel file and Word document, please ensure that: - The file name includes your name and student number. For excel, the file must be an .xls or .xlsx file (mac files, such as .numbers are not accepted). __________________________________________________________________________________ Outline Sweet Dreams is a well-established and successful wine producer with its vineyard located in the Gold Coast hinterland. The vineyard has 58 hectares of wine producing vines that, on average, produce 5,000 kilograms of grapes per hectare per annum. Their modern processing facilities yield a total of approximately 185,600 litres of wine each year. All wine is sold in the year of harvest and Sweet Dreams achieves an average wholesale price of $5.00 per litre across their wine varieties. After many years of operations, the winery's grape harvester needs to be replaced. The production manager has investigated several harvesters and has narrowed the choice to two specific models: a Self-Propelling Harvester and a Tow-Behind Harvester. Relative to the harvester being replaced, both these models are more efficient in that they reduce crop wastage and have lower variable costs. An initial analysis of the two harvesters conducted by the production manager indicates that the TowBehind Harvester should be purchased as its capital investment and overhaul costs are much lower than those for the Self-Propelling Harvester. The vineyard's owner, Mr. Bob, is not satisfied with the analysis as he believes it is too simplistic. As such, he has provided you with some detailed information related to the decision to replace the harvester and has asked that you complete the following task. Task Provide a detailed financial analysis of both harvesters, noting that Mr. Bob plans to replace the chosen piece of machinery at the end of its life. In addition, you are to write a detailed but concise report relating to the analysis and provide a recommendation on which harvester to purchase so that Mr. Bob can discuss this with the production manager. In completing this task, Mr. Bob has specifically requested the following: - The financial analysis is to be completed in Excel. The file is to be easily adjustable for different scenarios (interactive spreadsheet) and you must use the 'Analysis of Harvesters.xlsx' sheet provided as your input sheet. - The analysis of each piece of machinery should be conducted on separate sheets. - The report is to be short (600 words + 20% tolerance) and written in a manner that can be understood by a person with limited knowledge of financial analytical tools. It should also have the following sections: o Summary o Methodology - this section must explain and justify the methodology chosen for the financial analysis. NOTE: Do not list/describe the steps of the analysis. o Recommendations and Limitations. EFB210 Finance 1: Excel Formatting Guide Purpose: Outline Excel formatting standards for the Finance 1 Assignment. Set by: Sarah Bat Guiding Principles: Be consistent and keep it simple Font: Calibri 11 point font (excel default) preferred These are the cells where we input values. Given that the inputs drive the spreadsheets output, we want to highlight them for ease of reference. As such, highlight with yellow fill. One excepton is that you may choose 'no fill' for an input cell that is also a column heading for a table. For example, all input cells (primary data entry cells) in Figure 1 have been highlighted yellow except the year references that form the column headings. Input Cells: Output Cells: Do not contain any hard inputs (e.g. written in variable values - number such as 365 that don't change are not considered inputs), which means they are made up entrely of cell references [e.g. = A2 * (A3 + A4)]. Use standard font with no fill. You can use red for negatve values (occurs automatcally for some formats, e.g. dollar or accountng number formats). If you want to highlight a partcular value, use bold. Figure 1: Excel Table Formatting Example Table Formatting: Top row of table headings 'Bold' and 'Centred', may left justfy left most cell of column headings - refer figure above Try to only use horizontal lines - in design less is more, but don't confuse this with the basic economic premise that more is more.... For column headings, use a single line on top and double line at the bottom Last row ends with single line on the bottom Where appropriate use other horizontal lines May use double lines to indicate sum Graph Formatting (graphs are not required, but if you choose to use them, follow these formatting standards): Use the right graph for the partcular form of analysis Include meaningful Headings and Axis Titles (note I haven't included y-axis label in Figure 2 because values are self explanatory) Ensure that headings, plots and other informaton don't overlap each other. Choose an appropriate font Figure 2: Comparatve Graph of Share Price Informaton Sheet for Capital Budgetng Assignment You must use the provided 'Analysis of Harvesters.xlsx' sheet for all inputs and the capital budgetng analysis of each project should be conducted on separate sheets