FIN/571 Wiley PLUS Week 6 Assignment - 75449

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Wiley PLUS Week 6 Assignment

Fernando Miller

FIN/571

April 15, 2014

Reza Rafi

 

10.14 Net present value: Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires $1,968,450, have a life of five years, and would produce the cash flows shown in the following table. What is the NPV if the discount rate is 15.9 percent?

 

Year Cash Flow

1 $512,496

2 $242,637

3 $814,558

4 $887,225

5 $712,642

Source: http://www.investopedia.com/calculator/netpresentvalue.aspx

Net Present Value:

$10,037.20

PV of Expected Cash flows:

$1,978,487.20

 

11.20 FCF and NPV for a project: 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