Net present value for Megastar2022. Year (n) FV PV K (Discount rate) K% 1 + K 3000000 (1+K)1 1.1 2727272.727 10 10.1 1.1 4000000 (1+K)2 1.21 3305785.124 5000000 (1+K)3 1.331 3756574 6000000 (1+K)4 1.4641 4098080.732 Cash Inflow Cash outflow NPV 8000000 (1+K)5 1.61051 4967370.584 38696721.57394 25000000 13696721.57 11000000 (1+K)6 1.771561 6209213.231 900000 (1+K)7 1.9487171 4618423.064 8000000 (1+K)8 2.14358881 3732059.042 700000 (1+K)9 2.357947691 2968683.329 600000 (1+K)10 2.59374246 2313259.737 Total 38696721.57 Cash Inflow of all Present Values is : $ 38,696,721.57 Present value of Cash outflow is : $ 25,000,000 Net Present Value = PV of Cash inflows - PV of Cash Outflows = ($ 38,696,721.57- $ 25,000,000) = $ 13,696,721.57 dollars Since NPV is positive, the project can be adopted. Profitability index for MegaStar2022. Year (n) FV PV K K% 1 +K 3000000 (1+K)1 1.1 2727272.727 10% 10 TO.1 1.1 4000000 (1+K) 1.21 3305785.124 WIN 5000000 (1+K) 1.331 3756574 6000000 (1+K)4 1.4641 4098080.732 Cash Inflow Cash outflow PI 8000000 (1+K) 1.61051 4967370.584 38696721.57 25000000 1.547868863 11000000 (1+K)6 1.771561 6209213.231 9000000 (1+K)7 1.9487171 4618423.064 8000000 (1+K)8 2.14358881 3732059.042 7000000 (1+K)9 2.357947691 2968683.329 10 6000000 (1+K)10 2.59374246 2313259.737 38696721.57 The profitability index for this machine is 1.547868863 which is greater than 1 which makes this machine a viable project