Question: Monster Beverage is considering purchasing a new canning machine. This machine costs $3,500,000 up front. Required return = 11.3% What is the present value of
Monster Beverage is considering purchasing a new canning machine. This machine costs $3,500,000 up front. Required return = 11.3%
What is the present value of all future cash flows? Note: Do not include the value of year 0 cash flow.
Year | Cash Flow | Discounted Cash Flow |
|---|---|---|
0 | $-3,500,000 | $-3,500,000 |
1 | $1,000,000 | $898,473 |
2 | $1,200,000 | $968,704 |
3 | $1,300,000 | $942,883 |
4 | $900,000 | $586,492 |
5 | $1,000,000 | $585,496 |
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