9 - 10.3 I need help correcting the nvp Crescent Industries management is planni

Question

9 - 10.3 I need help correcting the nvp

Crescent Industries management is planning to replace some existing machinery in its plant. The cost of the new equipment and the resulting cash flows are shown in the accompanying table. If the firm uses an 18 percent discount rate for projects like this. What is the NPV of this project? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.) Should management go ahead with the project?

Explanation / Answer

Year present value @18% present value of cash flow 0 3046900 1 803710 0.84745763 681110.2 2 889200 0.71818443 638609.6 3 1247600 0.60863087 759327.9 4 1285160 0.51578888 662871.2 5 1576500 0.43710922 689102.7 sum of present value of cash inflow 3431022 cash outflow 3046900 NPV 384121.6 Machine should be purchased as it is having positive NPV

Related Questions

Navigate

• Browse (All)
• Browse 9
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.