1. The benefits and costs of an investment project (the purchase of a piece of machinery) are those given in the following table. In Excel, calculate net revenue, or the revenue from the investment mi

1. The benefits and costs of an investment project (the purchase of a piece of machinery) are those given in the following table. In Excel, calculate net revenue, or the revenue from the investment minus the costs; the present value coefficient for every year; and the present value of the net revenue. Add together column F to get the net present value of the project. Should the firm purchase the machine?

End of Year Investment

(Year 0) and cost Revenue Net Revenue Present Value Coefficient

1/(1+0.5)n Present Value of Net revenue

0 \$1000 ——

1 \$200 \$600

2 \$300 \$800

3 \$300 \$800

4 \$400 \$800

4 —- \$200*

problem is attached for more clarity

ATTACHMENT PREVIEW

1. The benefits and costs of an investment project (the purchase of a piece of machinery)
are those given in the following table. In Excel, calculate net revenue, or the revenue
from the investment minus the costs; the present value coefficient for every year; and the
present value of the net revenue. Add together column F to get the net present value of
the project. Should the firm purchase the machine?
End of
Year
Investment
(Year 0)
and cost
Revenue
Net
Revenue
Present
Value
Coefficient
1/(1+0.5)
n
Present
Value of
Net
revenue
0
\$1000
——
1
\$200
\$600
2
\$300
\$800
3
\$300
\$800
4
\$400
\$800
4
—-
\$200*