If Hammer Time Inc purchased a different machine for $2,702,072 the Net Cash Flows would be...

If Hammer Time Inc purchased a different machine for $2,702,072 the Net Cash Flows would be as follows: Year Net Cash Flow 1 $777,202.22 2 $772,102.22 3 $820,720.77 4 $977,121.72 5 $1,072,271.00 What is the Net Present Value if the interest rate was 7.02%? Attach work on last question This question is worth 12 total points $721,027.02 $876,543.21 $999,999.99 $1,427,453.26

Expert Solution

$876,543.21

Working:

Year	Cash flows	Discount Factor	Present Value of Cash flows
a	b	c=1.0702^-a	d=b*c
0	$ -27,02,072	1.0000	-27,02,072.00
1	7,77,202.22	0.9344	7,26,221.47
2	7,72,102.22	0.8731	6,74,131.95
3	8,20,720.77	0.8158	6,69,577.09
4	9,77,121.72	0.7623	7,44,884.40
5	10,72,271.00	0.7123	7,63,800.30

	Net Present Value		8,76,543.21

ekkarill92 answered 2 years ago

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