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It will also show you how to use the New Fixed-Asset Investment Evaluator       2 2 template.i 2 2dYou have to choose between two machines. Each has an expected life of five years and will result in     2 2dnet cash flows (savings) as shown in the table below. Use the tables on the "Worksheet" tab to help     H2 2+you make your choice, these will calculate:b  -----------'--  ,n--'--  ,n-   -- @ !-- @ !#-- @ !-- @ !"-- @ !m-  -}#}o- @ !L}#- -'- ,n-'- ,n-   -n- @ !n-- @ !-'05 *H &0"10 *H 0g +7Y0W03 +70%7)O•0 0 *H cVfE Y$cy?00)ъĽ5ǛSV0  *H 010U VeriSign Trust Network10U VeriSign, Inc.1,0*U #VeriSign Time Stamping Service Root1402U +NO LIABILITY ACCEPTED, (c)97 VeriSign, Inc.0 970512070000Z 991231070000Z010U VeriSign Trust Network10U VeriSign, Inc.1,0*U #VeriSign Time Stamping Service Root1402U +NO LIABILITY ACCEPTED, (c)97 VeriSign, Inc.00  *H 0. h|,-.  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Machine A Machine BCost Net Cash FlowResidual ValueS(1) The net present value of each machine at the 10 and 15 per cent discount rates..(2) Their respective internal rates of return.<(3) Their profitability indices at the 10 per cent discount.Net Present ValueYear 1Year 2Year 3Year 4Year 5YearInternal Rate of ReturnProfitability Index at 10% Outgoing Cash Incoming Cash Net Cash Net CashTWhen you have made your choice, select the "Solution" tab to see if you are correct.Lower Discount RateHigher Discount Rate$Present Value at Lower Discount Rate(Net Present Value at Lower Discount Rate%Present Value at Higher Discount Rate)Net Present Value at Higher Discount Rate*Profitability Index at Lower Discount RateGo to Article: See Also:&Factors Affecting Investment AppraisalUsing the information on the "Question" tab, fill in the top section of each of the tables below for the corresponding machine. Then enter the values for the lower and higher discount rates in the appropriate cells on the bottom half of the table. The sheet will then do the calculations for you. When you have decided which machine is worth investing in, select the "Solution" tab to see if you are correct.Investment Appraisal: QuestionInvestment Appraisal: WorksheetInvestment Appraisal: SolutionThis template will help to consolidate your understanding of the different methods of planning new capital investment. It will also show you how to use the New Fixed-Asset Investment Evaluator template. You have to choose between two machines. Each has an expected life of five years and will result in net cash flows (savings) as shown in the table below. Use the tables on the "Worksheet" tab to help you make your choice, these will calculate:$New Fixed-Asset Investment Evaluator Present ValueThe Profitability IndexScroll down to see the solution. Machine B is the choice. It comes ahead in all financial considerations: higher positive net present value at the 10 per cent discount level; lower negative net present value at the 15 per cent discount level; and a higher internal rate of return. And finally, as the projects call for different sizes of initial investment, the profitability index must be taken into consideration. Once again Machine B comes out better.Microsoft Business PlannerNote: If you save this template as a workbook, note the workbook's file name and location. To edit the workbook next time, you must open it using Excel. 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