Question text

Brew Ltd. introduced a new product, DV, to its range last year. The machine used to mold each item is a bottleneck in the production process meaning that a maximum of 5,000 units per annum can be manufactured.

	Year 0 $000	Year 1 $000	Year 2 $000	Year 3 $000	Year 4 $000
Investment	(20)
Income		65	155	200	(20)
Operating Cost		(71)	(127)	(155)	(15)

No terminal value or machinery scrap value is expected at the end of four years, when production of DV is planned to end. For investment appraisal purposes, Brew Ltd.uses a nominal (money) discount rate of 10%per year calculate net present value