Briarcrest Condiments is a spice-making firm. Recently, it developed a new proce

Question

Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,196,790. have a life of five years, and would produce the cash flows shown in the following table.

What is the NPV if the discount rate is 12.24 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)

IN DOLLARS Please

Year Cash Flow 1 $557,801 2 -251,493 3 849,340 4 866,464 5 886,812 Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,196,790. have a life of five years, and would produce the cash flows shown in the following table. What is the NPV if the discount rate is 12.24 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)

Explanation / Answer

Hi,

Please find the answer as follows:

NPV = -2196790 + 557801/(1+.1224)^1 -251493/(1+.1224)^2 + 849340/(1+.1224)^3 + 866464/(1+.1224)^4 + 886812/(1+.1224)^5 = - 254974.03

Answer is -254974.03

Thanks.

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