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Net Present Value: The Lees are considering adding a new piece of equipment that will speed...

Net Present Value: The Lees are considering adding a new piece of equipment that will speed up the process of building the bobbleheads. The cost of the piece of equipment is $42000. It is expected that the new piece of equipment will lead to cash flows of $17000, $29000, and $40000 over the next 3 years. If the appropriate discount rate is 12%, what is the NPV of this investment? Explain the findings.

I need the excel answer please.

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Expert Solution

NPV= $24,768.40

Calculation in Excel is given below as screenshot:

While using Excel for calculating NPV, first period cash flow should be added to the result of the Excel function of NPV wherein the values of 2nd period onwards shall be given.

jeff jeffy answered 2 years ago
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