Not a theory question. ANSWER = BEST CASE SCENARIO's NPV

Answer with r script or .rmd please.

Complete the Analysis to find the NPV of the best scenario. Bank rates can be used to determine WACC.

You (the new and only industrial engineer at the company) will be going into a budget meeting, and part of the agenda is the SC manager asking for ONLY R250 000 to buy a new delivery vehicle. He reckons that it is a no brainer, as: we have spent R20 000 on market research, and received the opinion that well have additional sales of R170 000, R140 000 and R100 000 for the next 3 years, while additional running costs are only R70 000 per year. Seeing that we can sell the vehicle again for probably 50% of its purchase price after the end of the project in three years time, we will make a profit of R75 000 even without considering depreciation not bad for an investment of R250 000. Even if we have to borrow money from the bank, interest rates are at an all-time low of only 6% per annum,so . Prepare your input for the meeting, looking at the actual profit that will be generated, as well as the impact on cash flow of the proposal. Also, show and discuss the validity of the 6% interest rate (you know that shareholders probably expect a 25% return, and the company funds are approximately split 50:50 between loans and equity). You know that the company tax rate is the standard 28%, and that vehicles can be depreciated by 40% in the 1st year, and 20% of the purchase price for the next 2 years chances are also good that the 50% resale value might not happen, as bakkies are generally abused. Capital gains tax is 21.6%' 'Set up three scenarios, 50% salvage, 40% salvage and 30% salvage and average bank rates of 6%, 8% and 10% since interest rates may change! Calculate the expected NPV and compare that with the Cash Flow' #I started with the following code once I understood the logic (you may do things differently) salvage <- c(0.5,0.4,0.3)# since 50% is a high estimate! BankRate <- c(0.06,0.08,0.1) #since 6% is the lowest rate in years...all time low CFnoTax <- c(rep(c(-250,170-70,140-70),each=3),100-70+salvage*250) dim(CFnoTax) <- c(3,4) #shape in rows per scenario Cash Flows are in rows in thousands of Rand ' [,1] [,2] [,3] [,4] [1,] -250 100 70 155 Row 1 is the cash flow with 50% salvage value (Best scenario) [2,] -250 100 70 130 Row 2 is the cash flow with 40% salvage value [3,] -250 100 70 105 Row 3 is the cash flow with 30% salvage value (Worst scenario)

Complete the Analysis to find the NPV of the best scenario. Answer will look like this in thousands xx.yyyyy or -xx.yyyyy such as -28.12345 if negative.