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Needs to be in spreadsheet form You are interested in buying a new machine that will increase the firm's revenues and decrease its costs. The

Needs to be in spreadsheet form
You are interested in buying a new machine that will increase the firm's revenues and decrease
its costs. The machine costs $125,000 today (time zero). It will provide positive cash flows of
$55,000 in year 1,$35,000 in year 2 and $60,000 in year 3. The firm's required rate of return
(WACC or k) is 10%. Calculate the NPV, IRR and payback period of the investment. Should we
invest?
You are interested in buying a new machine that will increase the firm's revenues and decrease
its costs. The machine costs $125,000 today (time zero). It will provide positive cash flows of
$55,000 per year for 3 years. The firm's required rate of return (k or WACC) is 12%. Calculate the
NPV, IRR and payback period of the investment. Should we invest?
You are interested in buying a new machine that will increase the firm's revenues and decrease
its costs. The machine costs $250,000 today (time zero). It will provide positive cash flows of
$100,000 in year 1,$120,000 in year 2 and $150,000 in year 3 and then a negative cash flow of
$60,000 in year 4. The firm's required rate of return (WACC or k) is 9%. Calculate the NPV, IRR
and payback period of the investment. Should we invest?
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