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 2^nd period onwards shall be given.

jeff jeffy answered 2 years ago

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