# Calculate the NPV for both conveyor belt systems.

The NPV of the two conveyor belt systems must be calculated by taking into consideration the annual operating costs and initial investment. You can also use this formula to determine NPV

NPV = (Cash Flow / (1 + r)^t) – Initial Investment

Here Cash Flow refers to the annual cash flow. r is the discounted rate and t the time period.

System A

• Your initial investment of \$290,000
• Operating costs for the year are \$85,000
• The system’s life expectancy is four years
• It is \$72,500/year.
• The annual cash flow is (\$85,000 – \$72,500)(1 – 0.34) = \$47,925

NPV = ((\$47,925 / (1 + 0.11)^1) + (\$47,925 / (1 + 0.11)^2) + (\$47,925 / (1 + 0.11)^3) + (\$47,925 / (1 + 0.11)^4)) – \$290,000

System A NPV = \$65,542.49

System B

• Your initial investment of \$405,000
• Operating costs for the year are \$75,000
• The system’s life expectancy is six years
• Depreciation = (\$405,000/6) = \$67.500 per annum
• The annual cash flow is (\$75,000 – \$67,500)(1 – 0.34) = \$40,825

NPV = ((\$40,825 / (1 + 0.11)^1) + (\$40,825 / (1 + 0.11)^2) + (\$40,825 / (1 + 0.11)^3) + (\$40,825 / (1 + 0.11)^4) + (\$40,825 / (1 + 0.11)^5) + (\$40,825 / (1 + 0.11)^6)) – \$405,000

System B NPV = 35,908.17

Based on the NPV calculations, it would be more financially beneficial for Hagar Industrial Systems Company to choose System A, as it has a higher NPV of \$65,542.49 compared to System B’s NPV of \$35,908.17. Based on this information, it is clear that system A will generate greater profits over the long-term.

## How do you place an order?

It takes a few steps to place an order with Us:

• The first step is to place your order. You will need to provide us with some basic information about your project.
• Once you have placed your order, you will be taken to our secure payment page.
• Once we receive your order, we will carefully review it and match you with a writer who has the skills and experience.
• Stay in contact with the writer and discuss vital details of research.
• Your completed proposal will be delivered via email within the specified deadline.

### You are secure when using our service

It's critical for each client to feel secure. As a result, we at Research Proposal Writing take precautions to secure your data.

Financial security You may securely pay for your purchase using a variety of secure payment methods.
Personal security The personal information of our clients is secure. Nobody else will have access to it.
Academic security We use a specialized program to check every completed paper to ensure that we deliver no-plagiarism samples.
Web security This website is safe from unauthorized breaches. We maintain our privacy management in line with the latest laws and regulations.

You can get help placing your order. If you have any questions about our services, please contact us. Our support staff is accessible 24 hours a day, 7 days a week.

If you're still looking for a way to improve your grades and hire expert writers, we've got you covered. Place an order on our website, and we'll help you with any paperwork you want. We will exceed your expectations.