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Please show the formulas used :) Thank you so much! Please help! 1 Data for capital investment problem NPV approach to capital budgeting 2 3

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Please show the formulas used :) Thank you so much!

Please help!

1 Data for capital investment problem NPV approach to capital budgeting 2 3 BO Mach $17,500 4 Investment Opportunity: Purchase Price: Useful Life: Cost of Capital: 5 5 years 6 14.00% PV 7 8 YEAR 0 0 1 2 3 3 9 Data: Cash in 0 8,000 9,000 10,000 11,000 13,000 Cash out Net Flow $17,500 $ (17,500) 5,000 3,000 5,000 4,000 5,000 5,000 5,000 6.000 5,000 8.000 $ 8,500 pointage 10 10 10 10 10 10 Summary of annual cash flows 4 12 5 NPV 10 -4 YEAR 0 1 2 25 26 Cash in Cash out $17,500 $ 8,000 5,000 9,000 5.000 10,000 5,000 11.000 5,000 13,000 5,000 $ Net Flow (17,500) ) 3,000 4,000 5,000 6,000 8,000 8,500 IRR approach to capital budgeting 27 50 3 4 4 5 input the assumed cost of capital 20 YEAR 22 Instructions: 0 1 2 Analyze this investment opportunity and make a recommendation using the following 2 methods: 3 RSS RSS CASH IN CASH OUT NET FLOW PV 17,500 (17,500)-17,500.00 8,000 5,000 3,000 3,000.00 9,000 5,000 4,000 4,000.00 10,000 5,000 5,000 5,000.00 11,000 5,000 6,000 6,000.00 13,000 5,000 8.000 8,000.00 $ 8,500 8,500.00 (must be 0) 4 5 5 27 * NPV * IRR NPV Invest or not? 10 100

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