2. The company is considering a project involving the purchase of new equipment. Change the data area of your worksheet to match the following: Use Exhibit 14B-1 and Exhibit 14B-2. (Use appropriate factor(s) from the tables provided.)

Chapter 14: Applying Excel
Data
Example E
Cost of equipment needed	$320,000
Working capital needed	$30,000
Overhaul of equipment in four years	$25,000
Salvage value of the equipment in five years	$25,000
Annual revenues and costs:
Sales revenues	$385,000
Cost of goods sold	$245,000
Out-of-pocket operating costs	$60,000
Discount rate	10	%

a. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%, between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.)?

b. Reset the discount rate to 10%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value?