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1. The benefits and costs of an investment project (the purchase of a piece of machinery) are those given in the following table. In Excel, calculate...

1. The benefits and costs of an investment project (the purchase of a piece of machinery) are those given in the following table. In Excel, calculate net revenue, or the revenue from the investment minus the costs; the present value coefficient for every year; and the present value of the net revenue. Add together column F to get the net present value of the project. Should the firm purchase the machine?


End of Year Investment
(Year 0) and cost Revenue Net Revenue Present Value Coefficient
1/(1+0.5)n Present Value of Net revenue
0 $1000 ------
1 $200 $600
2 $300 $800
3 $300 $800
4 $400 $800
4 ---- $200*


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1. The benefits and costs of an investment project (the purchase of a piece of machinery) are those given in the following table. In Excel, calculate net revenue, or the revenue from the investment minus the costs; the present value coefficient for every year; and the present value of the net revenue. Add together column F to get the net present value of the project. Should the firm purchase the machine? End of Year Investment (Year 0) and cost Revenue Net Revenue Present Value Coefficient 1/(1+0.5) n Present Value of Net revenue 0 $1000 ------ 1 $200 $600 2 $300 $800 3 $300 $800 4 $400 $800 4 ---- $200*
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1. The benefits and costs of an investment project (the purchase of a piece of machinery)
are those given in the following table. In Excel, calculate net revenue, or the revenue
from the investment...

Sign up to view the full answer

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