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)
1. 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]
2. Should Crypto Currency Project be accepted or rejected?