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Can someone please solve these finance question for me. Thanks in advance!?
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
- ProfLv 77 years agoFavorite Answer
It is not appropriate of you to assign your homework to others. To get help you should do the work as well as you can and provide your solution so someone can help you by pointing out where you are wrong and by explaining areas where you show weaknesses. You learn nothing if someone does the work for you.
1. You have to find the present value of each cash flow, discounted at the given interest rate. Because the cash flows are not the same, you have to make 5 separate calculations and then add up the present values. A financial calculator does this most easily, but you can also use a spreadsheet function or a formula. PV = FV / (1+r)^n. So
1
FV = 386,627
n = 1
r% = 12.35%
PV = ? == $244,127.28
2
-166,811.75
3. etc.