172 1 Chapter 13: Applying Excel 3 Data 4 Example E 5 Cost of equipment needed 6 Working capital neoded 7 Overhaul of equipment in four years 8 Salvage value of the equipment in five years 9 Annual revenues and costs: 10 Sales revenues 11 Cost of goods sok 2 Out-of-pocket operating costs 13 Discount rate 14 15 Enter a fomula into each of the cels marked with a? below 16 Exhibit 13-8 17 18 19 Purchase of equipment 20 Investment in working capital 21 Sales 22 Cost of goods sold 23 Out-of-pocket operating costs 24 Ovorhaul of equipmont 25 Salvage value of the equipment 26 Working capital released 27 Total cash flows (a) 28 Discount factor (14%) (b) 29 Present value of cash flows (a)x (b) 30 Net present value 31 2 Use the fomulas from Appendix 13B 33 | Present value of $1 1/(1 +r)^n 34 Present value of an annuity of $1(1/r111+rn)) 35 where n is the number of years and r is the discount rate 36 37 38 39 40 $60,000 $100,000 $5,000 10,000 $200,000 $125,000 $35,000 14% Years