Question

Homework: Assignment 5 Save 1 a 12 concerning to Score: 2.5 of 5 pts 12 of 18 (18 complete) HW Score: 69.32%, 69.32 of 100 pts w Score: 62%, co s % P10-6 (similar to) Question Help NPV for varying costs of capital LePew Cosmetics is evaluating a new fragrance-mixing machine. The machine requires an initial investment of $380,000 and will generate after-tax cash inflows of $62,250 per year for 8 years. If the cost of capital is 13%, calculate the net present value (NPV) and indicate whether to accept or reject the machine. The NPV of the project is $ . (Round to the nearest cent.)

Answer 1

F1128 B foc =SUM(F1119:F1127) D C E F Year Pv@13% 1 2 A 1117 1118 1119 1120 1121 1122 1123 1124 1125 1126 1127 1128 1129 1130 1121 Cashflows $ (380,000.00) $ 62,250.00 $ 62,250.00 $ 62,250.00 $ 62,250.00 $ 62,250.00 $ 62,250.00 $ 62,250.00 $ 62,250.00 0.884955752 0.783146683 0.693050162 0.613318728 0.542759936 0.480318527 0.425060644 0.376159862 NPV Pvcf $ (380,000.00) $ 55,088.50 $ 48,750.88 $ 43,142.37 $ 38,179.09 $ 33,786.81 $ 29,899.83 $ 26,460.03 $ 23,415.95 $ (81,276.55) Reject the Project, since its NPV is Negative

F1128 fc =SUM(F1119:F1127) в 1117 Year Cashflows 1118 1119 1120 1121 نم نيا | -380000 62250 62250 62250 62250 62250 62250 62250 Pv@13% =1 =E1119/1.13 =E1120/1.13 =E1121/1.13 =E1122/1.13 =E1123/1.13 =E1124/1.13 =E1125/1.13 =E1126/1.13 NPV 1122 1123 1124 1125 1126 1127 1128 1129 1130 1131 I Pvcf =D1119*E1119 =D1120*E1120 =D1121*E1121 =D1122*E1122 =D1123*E1123 =D1124*E1124 =D1125*E1125 =D1126*E1126 =D1127*E1127 =SUM(F1119:F1127) | 62250 Reject the Project, since its NA