Question

Please answer both parts of this question.

Carla Vista Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that this action will result in additional cash flows of $313,000 each year for three years. If the discount rate is 17.5 percent, what is the NPV on this project? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.)

Oriole, Inc. management is considering purchasing a new machine at a cost of $4,460,000. They expect this equipment to produce cash flows of $797,290, $884,750, $1,010,030, $938,000, $1,185,260, and $1,141,200 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.)

Answer 1