Quick Fix Company is considering buying a Crypto Currency Machine to print crypto currency with the following projected investment and cash flow amounts. Machine has no salvage value.
Year Cash Flow Amounts
0 ($11,800) = Initial Investment
1 $22,500
2 $21,000
3 $12,000
4 $8,500
5 ($14,800)
6. Compute the NPV for the Crypto Currency Project if the appropriate cost of capital is 6%.
[Excel Formula = NPV] [Hint: NPV of Cash Flows – Initial Investment = Net Present Value]
A. $11,114.62
B. ($ 685.68)
C. $ 685.68
D. ($ 11,800.00)
7. Should Crypto Currency Project be accepted or rejected?
A. Accepted
B. Rejected