Exercise / Step 2: Net Present Value
Let's calculate a Net Present Value
From a downloadable spreadsheet which you will use as a framework (available, click on Step 2 NPV_frame.xlsx to download), you will calculate a Net Present Value from basic parameters.
You got the following information:
– Investment lifetime 8 years
– Cost of the machine 1,000 ($k)
– Annual EBITDA 400 ($k)
– Corporate tax rate 30%
– WACC (discount rate) 7%
