6.Quick Fix Company is considering buying a Crypto Currency Machine to print cry

Question

6.Quick Fix Company is considering buying a Crypto Currency Machine to print crypto currency with the following projected investment and cash flow amounts. Machine has no salvage value.

Year Cash Flow Amounts

0 ($11,800) = Initial Investment

Year Cash Flow Amounts 0 ($11,800) = Initial Investment

1 $5,900

2 $6,900

3 $6,900

4 $5,900

5 ($14,800)

6.Compute the NPV for the Crypto Currency Project if the appropriate cost of capital is 6%. [Excel Formula = NPV] [Hint: NPV of Cash Flows – Initial Investment = Net Present Value]

A. $11,114.62 B. ($ 685.68) C. $ 685.68 D. ($ 11,800.00)

(Excel Formula)

Explanation / Answer

Year Cashflow Present value@6% Discounted cashflow 0 -11800 1 -11800 1 5900 0.9434 5566.037736 2 6900 0.8900 6140.975436 3 6900 0.8396 5793.373053 4 5900 0.7921 4673.352613 5 -14800 0.7473 -11059.42096 NPV -685.68 Option B

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