Problem Two: Project Evaluation Methods at Cott Beverages PLEASE HELP DEAR SIR/MA'AM HOW DO I SOLVE THIS
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Problem Two: Project Evaluation Methods at Cott Beverages
PLEASE HELP DEAR SIR/MA'AM HOW DO I SOLVE THIS IN EXCEL
Cott Beverages is considering the purchase of a bottling machine for CAD 28,000. It is expected to have a useful life of seven years with a zero terminal disposal price. The plant manager estimates the following cash savings:
Year | Amount (CAD) |
1 | 10,000 |
2 | 8,000 |
3 | 6,000 |
4 | 5,000 |
5 | 4,000 |
6 | 3,000 |
7 | 3,000 |
Total | 39,000 |
Cott has an RRR of 16.0%.
REQUIRED:
- Compute the payback period.
- Compute the discounted payback period.
- Compute the NPV.
- Compute the IRR.
- Compute PI.
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