The benefits and costs of an investment project (the purchase of a piece of machinery) are those given in the following table. In excel, calculate net revenue, or the revenue from the investment minus the costs; the present value coefficient for every year; and the present value of the net revenue. Add together column F to get the net present value of the project. Should the firm purchase the machine?

End of Year      Investment    Revenue      NE     PV Coefficient 1/(1+0.5)n     PVNR

0                      1000                ----        

1                      200                  600

2                      300                  800

3                      300                  800

4                      400                  800

4                      ---                    200 (salvage value)