a. What is the net present value of the project? (Negative amount should be indicated by a minus sign. Round your present value factor to 3 decimals and round all other intermediate calculations to nearest whole dollar.) Net present value is _________________________

b. 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.)? The internal rate is between _____% and ____%

c. Reset the discount rate to 11%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value? Minimum salvage value required to to generate a positive present value ______________________

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.) . B 1 Chapter 14: Applying Excel 2 3 Data 4 5 $ 6 $ Example E Cost of equipment needed Working capital needed Overhaul of equipment in four years Salvage value of the equipment in five years Annual revenues and costs: 310,000 30,000 25,000 25,000 7 $ 8 $ 9 10 Sales revenues $ 11 $ 410,000 240,000 85,000 Cost of goods sold Out-of-pocket operating costs Discount rate 12 $ 13 11 %