Question

Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.80 million and create incremental cash flows of $552,306.00 each year for the next five years. The cost of capital is 11.74%. What is the net present value of the J-Mix 2000? Submit Answer format: Currency: Round to: 2 decimal places, Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.90 million and create incremental cash flows of $593,392.00 each year for the next five years. The cost of capital is 10.87%. What is the internal rate of return for the J-Mix 2000? Submit Answer format: Percentage Round to: 2 decimal places (Example: 9.24% % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) Caspian Sea Drinks is considering buying the J-Mix 2000. It will allow them to make and sell more product. The machine cost $1.64 million and create incremental cash flows of $549,073.00 each year for the next five years. The cost of capital is 11.02%. What is the profitability index for the J-Mix 2000? Submit Answer format: Number: Round to: 3 decimal places

Answer 1

C22 fic =1+388296.71/1640000 А 1 year year Cash flows [email protected]% Present value 0 $(1,800,000.00) 1.0000 $(1,800,000.00) 1 $ 552,306.00 0.8949 $ 494,277.79 2 $ 552,306.00 0.8009 $ 442,346.33 3 $ 552,306.00 0.7168 $ 395,871.07 4 $ 552,306.00 0.6415 $ 354,278.74 5 $ 552,306.00 0.5741 $ 317,056.33 NPV $ 203,830.25 Cash flows 0 $ 1 $ 2 $ 3 $ 4 $ 5 $ (1,900,000.00) 593,392.00 593,392.00 593,392.00 593,392.00 593,392.00 16.96% IRR Cash flows [email protected]% Present value 0 $ (1,640,000.00)| 1.0000 $(1,640,000.00) 1 $ 549,073.00 0.9007 $ 494,571.25 2 $ 549,073.00 0.8113 $ 445,479.42 3 $ 549,073.00 0.7308 $ 401,260.51 4 $ 549,073.00 0.6583 $ 361,430.83 5 $ 549,073.00 0.5929 $ 325,554.70 NPV $ 388,296.71 17 18 19 20 PI 21 1+NPV/Initial investment 1+388296.71/1640000 1.237! 22

for IRR(G2:G7) G8 A 1 year 20 31 42 [email protected]% в Cash flows -1800000 552306 552306 552306 552306 552306 D Present value =B2*C2 =B3*C3 =B4*C4 =B5*C5 =B6*C6 =B7*C7 =SUM(D2:07) =C2/1.1174 =C3/1.1174 =C4/1.1174 =C5/1.1174 =C6/1.1174 NPV 53 Cash flows - 1900000 593392 593392 593392 593392 593392 =IRR G2:67) 64 9 10 [email protected]% 11 year 12 0 13 1 14 2 15 3 16 4 17 5 Cash flows -1640000 549073 549073 549073 549073 549073 =C12/1.1102 =C13/1.1102 =C14/1.1102 =C15/1.1102 =C16/1.1102 NPV Present value | =B12*C12 =B13*C13 =B14*C14 =B15*C15 =B16*C16 =B17*C17 =SUM(D12:017) 18 19 20 PI 1+NPV/Initial investmer 1+388296.71/1640000 =1+388296.71/1640000