Question
You have been offered a unique investment opportunity. If you invest $722 today, you will receive $141 one year from now, $513 two years from
You have been offered a unique investment opportunity. If you invest $722 today, you will receive $141 one year from now, $513 two years from now, and $1,238 three years from now. What is the NPV of the opportunity if the cost of capital is 8% per year?
Mystic Beverage Company is considering purchasing a new bottling machine. The new machine costs $242,870, plus installation fees of $10,980 and will generate earning before interest and taxes of $94,016 per year over its 7-year life. The machine will be depreciated on a straight-line basis over its 7-year life to an estimated salvage value of 0. Mystics marginal tax rate is 0%. Mystic will require $39,570 in NWC if the machine is purchased. Determine the annual cash flow in year 3 if the machine is purchased. round your answer to two decimals
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