Problem 20-43 (similar to) Question Help Frosted Cupcake Company is considering expanding by buying a new (additional) machine that costs $37,000, has zero terminal disposal value, and has a 10-year useful life. It expects the annual increase in cash revenues from the expansion to be $23,500 per year. It expects additional annual cash costs to be $15,300 per year. Its cost of capital is 4%. Ignore taxes. (Click the icon to view the present value of $1 factors.) (Click the icon to view the present value annuity of $1 factors.) Required Requirement 1. Calculate the NPV and IRR for this investment. First calculate the NPV of this investment. (Use factors rounded to three decimal places, X.XXX. Round your final answer to the nearest whole dollar Use a minus sign or parentheses for a negative net present value.) The NPV is S X Required Enter your answer in the a Calculate the NPV and IRR for this investment. 1. Check Answer 10 parts remaining Assume the finance manager of Frosted Cupcake Company is not sure about the cash revenues and cost5 The revenues could be anvwhere from 2. xENE DELL 11 pts 3 of 4 (2 complete) X Required Calculate the NPV and IRR for this investment. 1. 2. Assume the finance manager of Frosted Cupcake Company is not sure about the cash revenues and costs. The revenues could be anywhere from 6% higher to 6% lower than predicted. Assume cash costs are still $15,300 per year. What are NPV and IRR at the high and low points for revenue? 3. The finance manager thinks that costs will vary with revenues, and if the revenues are 6% higher, the costs will be 2% higher. If the revenues are 6% lower, the costs will be 6% lower. Recalculate the NPV and IRR at the high and low revenue points with this new cost information. The finance manager has decided that the company should earn 2 % more than the cost of capital on any project. Recalculate the original NPV in requirement 1 using the new discount rate 4. Print Done arts emaining Clear All DELL