Question: please explain steps in excel Question 2 ABC Corp is planning to purchase a machine. The initial cost of the machine is S1 million. The

please explain steps in excel Question 2 ABC Corp is planning

please explain steps in excel

Question 2 ABC Corp is planning to purchase a machine. The initial cost of the machine is S1 million. The net present value of cash flows from the machine is expected to be S1.3 million today for the next 20 years. The volatility of the future cash flows is 15% per year. After 20 years, the value of selling the machine is $0. The manufacturer of the machine also offers an option that ABC Corp can sell the machine back to the manufacturer after 15 years at $0.75 million. The cost of the option now is $ 1,000. The risk-free rate is 5% per year. Should ABC Corp buy the option or not

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