1). Briarcrest Condiments is a spicemaking firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $1,776,329. have a life of five years, and would produce the cash flows shown in the following table.
Year  Cash Flow 

1  $613,201 
2  225,580 
3  1,015,102 
4  1,011,437 
5  844,196 
What is the NPV if the discount rate is 15.69 percent? (Enter negative amounts using negative sign e.g. 45.25. Round answer to 2 decimal places, e.g. 15.25.)
2). Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $12.10 million. This investment will consist of $2.60 million for land and $9.50 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at a price of $5.15 million, $2.11 million above book value. The farm is expected to produce revenue of $2.05 million each year, and annual cash flow from operations equals $1.91 million. The marginal tax rate is 35 percent, and the appropriate discount rate is 9 percent. Calculate the NPV of this investment. (Round intermediate calculations and final answer to 2 decimal places, e.g. 15.25.)
The project should be: Accepted or Rejected.
3). Bell Mountain Vineyards is considering updating its current manual accounting system with a highend electronic system. While the new accounting system would save the company money, the cost of the system continues to decline. The Bell Mountain s opportunity cost of capital is 10.4 percent, and the costs and values of investments made at different times in the future are as follows:
Year  Cost  Value of Future Savings (at time of purchase) 


0  $5,000  $7,000  
1  4,250  7,000  
2  3,500  7,000  
3  2,750  7,000  
4  2,000  7,000  
5  1,250  7,000 
Calculate the NPV of each choice. (Round answers to the nearest whole dollar, e.g. 5,275.)
The NPV of each choice is:
NPV_{0} = $
NPV_{1} = $
NPV_{2} = $
NPV_{3} = $
NPV_{4} = $
NPV_{5} = $
Suggest when should Bell Mountain buy the new accounting system?
4). 
Chip s Home Brew Whiskey management forecasts that if the firm sells each bottle of SnakeBite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 92 percent as high if the price is raised 12 percent. Chip s variable cost per bottle is $10, and the total fixed cash cost for the year is $100,000. Depreciation and amortization charges are $20,000, and the firm has a 30 percent marginal tax rate. Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firm s FCF for the year? 
(Round answers to nearest whole dollar, e.g. 5,275.) 


$ 
5).Capital Co. has a capital structure, based on current market values, that consists of 48 percent debt, 11 percent preferred stock, and 41 percent common stock. If the returns required by investors are 9 percent, 12 percent, and 17 percent for the debt, preferred stock, and common stock, respectively, what is Capital s aftertax WACC? Assume that the firm s marginal tax rate is 40 percent.(Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25%.)
