Can someone please help me solve these finance question, I do not understand how. Thanks?

Question

Question 1
Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,245,017. have a life of five years, and would produce the cash flows shown in the following table.
Year	Cash Flow
1	$386,627
2	-187,413
3	756,724
4	752,278
5	818,541

What is the NPV if the discount rate is 12.35 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.) 
NPV is	$
Question 2 
 
Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.10 million. This investment will consist of $2.30 million for land and $9.80 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at a price of $5.03 million, $2.23 million above book value. The farm is expected to produce revenue of $2.07 million each year, and annual cash flow from operations equals $1.91 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 10 percent. Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)
NPV		$

The project should be		 
Question 3 
 
Bell Mountain Vineyards is considering updating its current manual accounting system with a high-end electronic system. While the new accounting system would save the comp

N3XV$81 · Answer

Q1) What is the NVP after five years.
a) Determine the Net Cash flow
Formula: Tt = Rt / [1+(i)^t]
t – the time of the cash flow
i – the discount rate (the rate of return that could be earned on an investment in the financial markets with similar risk.); the opportunity cost of capital (decimal number)
Rt – the net cash flow i.e. cash inflow – cash outflow, at time t . For educational purposes, R0 is commonly placed to the left of the sum to emphasize its role as (minus) the investment

let T0 = -2,245,017.00
T1 = 386,627 / [1+(0.1235)^1]
T1 = 386,627 / 1.1235 = 344.127.28 --> net cash flow in year 1.
T2 = -187,413 / [1+(0.1235)^2]
T2 = -187,413 / [1+0.01525225] = -184,597.47 --> cash flow in year2
T3 = 756,724 / [1+(0.1235)^3] = 755,301.27
T4 = 752,278 / [1+(0.1235)^4] = 752,103.04
T5 = 818,541 / [1+(0.1235)^5] = 818,517.48

b) Solve for the NPV, where NPV is the sum of all the net cash flows after t years.

therefore,
NPV = T0 + T1 + T2 + T3 + T4 + T5
NVP = -2,245,017.00 + 344,127.28 + (-184,597.47) + 755,301.27 + 752,103.04 + 818,517.48

NVP = -$240,434.60 --> Answer

Q2) Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)

a) Solve for the Cash flow per year.
T0 = -12,100,000.00
T1 = 1,910,000.00 / 1.1 = 1,736,363.64
T2 = 1,910,000.00 / 1.01 = 1,891,089.11
T3 = 1,910,000.00 / 1.001 = 1,908,091.91
T4 = 1,910,000.00 / 1.0001 = 1,909,809.02
T5 = 1,910,000.00 / 1.00001 = 1,909,980.90
T6 = 1,910,000.00 / 1.000001 = 1,909,998.09
T7 = 1,910,000.00 / 1.0000001 = 1,909,999.81
T8 = 1,910,000.00 / 1.00000001 = 1,909,999.98
T9 = 1,910,000.00 / 1.000000001 = 1,910,000.10
T10 = 17,966,000.00 / [1.0000000001] = 17,966,000.00

d) Determine NPV.
NPV = -12,100,000.00 + 34,961,332.56
NVP = $22,861,332.56 --> Answer.

Note: My computations here are probably incorrect, but you may be able to get an idea from this solution. And probably may come up a real solution to  solve the problem.

And to tell you honestly, I really do not know how to solve the marginal tax rate value. Because, I think I need a marginal tax bracket for this one.

Good Luck!

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Can someone please help me solve these finance question, I do not understand how. Thanks?

1 Answer