Description
Hello!
I need help in doing these problems for my Financial Management of Construction Organizations Hw, I'll provide lecture slides if need it!
Please find the assignment sheet on the attachment.
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Explanation & Answer

Hi. here is your assignment :) Let me know if you need more help or if you have any questions so that I can explain to you okay :). I am willing to do further explanation if would ask ;)
Question 1:
Caterpillar
A
B
C
D
E
F
G
H
I
1
Year
0
1
2
3
4
5
6
7
8
2
Cost
55000
6000
6000
6000
6000
6000
6000
6000
3
Saving
4
Salvage Value
= 30%*55000
5
Free Cash flow
-55000
6
Interest rate
3%
6000
16500
6000
6000
6000
6000
6000
6000
6000
22500
- Using Excel
54969.50 =NPV(A6,B1:I1)+A5
NPV
Number of Year(n) = 8
NPV = PV of Savings + PV of Salvage Value - Initial Investment = 6000* (1-(1+r)-n/r +
21000/(1+r)n -55000 = 6000* (1 -(1+3%)-8/3% + 16500/(1+3%)8 -55000 = -54969.50
John Deerer
A
B
C
D
E
F
G
H
I
1
Year
0
1
2
3
4
5
6
7
8
2
Cos...
