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Can someone please help me solve the finance problems, I do not understand any of them please help me Thanks?

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

1 Answer

Relevance
  • Anonymous
    7 years ago

    17

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