Question Four

Acosta Sugar company planning to purchase new automating machine that will cost $$600,000.$ The

machine will increase net revenue by $$200,000$ for the next four years. The require rate on unlevered

equity is $13\%.$ To fund the purchase of the machine the company can also borrow $$200,000$ at $5\%$ rate

and pay back the debit over the next $4$ years with interest. It will be floatation cost for this borrowing

which is $$15,000.$ The company come under $30\%$ tax bracket.

Calculate NPV and APV?

Please solve step by step