A Company has an opportunity to produce and sell a new product. Your team has been asked to use

capital budgeting analysis to determine whether this would be a profitable venture for the company.

New equipment would have to be acquired to produce the product. The equipment would cost

$$155,000$ and be usable for $10$ years. After $10$ years, it would have a salvage value equal to $5\%$ of the

original cost. The asset will be sold at salvage value at the end of the asset's life.

The discount rate for the company is $7\%.$

See below for the forecasted net income per year from this project.

Required:

Calculate the Payback period and explain the results. $($note$,$ you can only use

the formula with even cash flows, research how to calculate it with uneven

cashflows$)$

Calculate ARR and explain the results $($use average net income for this

calculation$)$

Calculate NPV and explain the results

Look up the prime interest rate as of today and explain how using that rate

would change the NPV $($would it increase it or decrease it$).$

Deliverables: Excel workbook, professionally formatted, easy to follow,

formulas are required, textbox with explanation of each result. PLEASE SHOW FORMULAS AS WELL IN EXCEL AND EXPLANATION. thank you