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eases 3 years Create a table with: interest ranging from 0% o 50% increasing by 5% increments NPV for each of these %. Use NPV function. Tip: do not include the cost of machine in the function; add that amount to NPV. - Plot the NPV's for all %s. - What is the IRR(s)? Not only graphically, but solve for IRR(s) using Goal Seek for the problem. Cashflow: Year

eases 3 years Create a table with: interest ranging from 0% o 50% increasing by 5% increments NPV for each of these %. Use NPV function. Tip: do not include the cost of machine in the function; add that amount to NPV. - Plot the NPV's for all %s. - What is the IRR(s)? Not only graphically, but solve for IRR(s) using Goal Seek for the problem. Cashflow: Year

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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12 B You are adding a machine to an existing factory that costs $4 million (this is both an investment and loan).. - Years 1-4 = $8 million production with a $1 million decrease each of the 4 yrs. - Years 5-7 = -4.5 million that that decreases by $1 million for each of the 3 years Create a table with: interest ranging from 0% o 50% increasing by 5% increments NPV for each of these %. Use NPV function. Tip: do not include the cost of machine in the function; add that amount to NPV. - Plot the NPV's for all %s. - What is the IRR (s)? Not only graphically, but solve for IRR(s) using Goal Seek for the problem. Cashflow: Year 0 с -4 million 1 D 2 E 3 F 4 3.5 million 2.5 millior 1.5 millior .5 million G 5 H 6 I 7 -.5 millior-1.5 millio-2.5 million J
Transcribed Image Text:12 B You are adding a machine to an existing factory that costs $4 million (this is both an investment and loan).. - Years 1-4 = $8 million production with a $1 million decrease each of the 4 yrs. - Years 5-7 = -4.5 million that that decreases by $1 million for each of the 3 years Create a table with: interest ranging from 0% o 50% increasing by 5% increments NPV for each of these %. Use NPV function. Tip: do not include the cost of machine in the function; add that amount to NPV. - Plot the NPV's for all %s. - What is the IRR (s)? Not only graphically, but solve for IRR(s) using Goal Seek for the problem. Cashflow: Year 0 с -4 million 1 D 2 E 3 F 4 3.5 million 2.5 millior 1.5 millior .5 million G 5 H 6 I 7 -.5 millior-1.5 millio-2.5 million J
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