Briarcrest Condiments is a spice-making firm. Recently, it developed a new proce
ID: 2703344 • Letter: B
Question
Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,456,232. have a life of five years, and would produce the cash flows shown in the following table.
Year
Cash Flow
1
$497,326
2
-182,123
3
825,636
4
695,762
5
707,012
What is the NPV if the discount rate is 14.72 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)
Year
Cash Flow
1
$497,326
2
-182,123
3
825,636
4
695,762
5
707,012
Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,456,232. 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 14.72 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)Explanation / Answer
NPV = -2456232 + 497326/1.1472 - 182123/1.1472^2 + 825636/1.1472^3 + 695762/1.1472^4 + 707012/1.1472^5 = -856726.78