1. Learning Objectives (a) Develop proforma Project Income Statement Using Excel Spreadsheet (b) Compute Net Project Cash flows, NPV, IRR and PayBack Period (c) Develop Problem-Solving and Critical Thinking Skills 1) Life Period of the Equipment = 4 years 8) Sales for first year (1) 200000 2) New equipment cost -200000 9) Sales increase per year 0.05 3) Equipment ship & install cost -35000 10) Operating cost: -120000 4) Related start up cost -5000 (60 Percent of Sales) -0.6 5) Inventory increase 25000 11) Depreciation (Straight Line)/YR -60000 6) Accounts Payable increase 5000 12) Tax rate 0.35 7) Equip. Salvage Value Estimated 15000 13) Cost of Capital (WACC) 0.1 End of Year 4 (fully depreciated )