You have the opportunity to make an investment with a landing of 10,000,000$, 1,500,000 machines, an outsourcing of 500,000 and a financing cost of 1,000,000. The machines have a scrap value of 1,000,000 at the end of the 4th year. You will pay interest at the end of the project, ie $400,000. If you make this investment now, you will receive $4,500,000, $3,000,000, $5,000,000 and $4,000,000 a year later, respectively. The appropriate discount rate for this investment is 14 percent. The tax rate is 30%. Should you make the investment?

Answer rating: 100% (QA)

To determine whether the investment is worth making we need to calculate the net present value NPV o... View the full answer