a$.$Allied has a standard form that is used in the capital budgeting process. $($See Table IC $12\mathrm{.}1.)$ Part of the table has been completed, but you must replace the blanks with the missing numbers. Complete the table using the following steps:

$1.$Fill in the blanks under Year $0$ for the initial investment outlays: CAPEX $\backslash$times $(1$ T$)$ and $$NOWC$.$

$2.$Complete the table for unit sales, sales price, total revenues, and operating costs.

$3.$Complete the table down to after$-$tax operating income and then down to the project$$s operating cash flows, EBIT $(1$ T$)+$ DEP.

$4.$Fill in the blanks under Year $4$ for the terminal cash flows and complete the project free cash flow line. Discuss the recovery of net operating working capital. What would have happened if the machinery had been sold for less than its book value?TABLE IC $12\mathrm{.}1,$ Allied's Lemon Juice Project $($in thousands$)$

End of Year:

$0$

$2$

$3$

$4$

I. Investment Outlays

CAPEX $(1-T)$

Increase in inventory

Increase in accounts payable

$\frac{?}{{?}_{\frac{?}{?}}}$ NOWC

II$.$ Project Operating Cash Flows

Unit sales $($thousands$)$

Price$/$unit

Total revenues

Operating costs

Depreciation: $100\%$ bonus depreciation in Year $0$

Total costs

EBIT $($or operating income$)$

Taxes on operating income $(25\%)$

EBIT $(1-T)=$ After$-$tax operating income

Add back depreciation

EBT $(1-$ T$)+$ DEP

III. Project Termination Cash Flows

Salvage value $($taxed as ordinary income$)$

Tax on salvage value $(25\%)$

After$-$tax salvage value

$\frac{?}{{?}_{\frac{?}{?}}\text{N}\text{O}\text{W}\text{C}}-$ Recovery of NOWC

Project free cash flows $-$

EBIT $-$ T$)+$ DEP $-$ CAPEX $-\frac{?}{{?}_{\frac{?}{?}}}$ NOWC

IV$.$ Results

NPV $-$

IRR $-$

MIRR $=$

What is the primary weakness of sensitivity analysis? What are its primary advantages?

g$.$ Unrelated to the lemon juice project, Allied is upgrading its plant and must choose between two machines that are mutually exclusive. The plant is highly successful, so whichever

machine is chosen will be repurchased after its useful life is over. Both machines have an after$-$tax cost of $$50,000$; however, Machine A provides aftertax savings of $$17,500$ per year for $4$

years, while Machine B provides after$-$tax savings of $$34,000$ in Year $1$ and $$27,500$ in Year $2.$

Please show all Excel formulas. Thank you