a. What 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 c. 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 of return is between % and d. Reset the discount rate to 18%. 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 generate a positive present value Chapter 13: Applying Excel Data Example E Cost of equipment needed Working capital needed Overhaul of equipment in four years $480,000 $60,000 $45,000 Salvage value of the equipment in five years $25,000 Annual revenues and costs: $440,000 $230,000 $50,000 Sales revenues Cost of goods sold Out-of-pocket operating costs Discount rate 18% Enter a formula into each of the cells marked with a ? below Exhibit 13-8 Years A Now 3 5 Purchase of equipment Investment in working capital Sales 7 7 7 Cost of goods sold Out-of-pocket operating costs Overhaul of equipment Salvage value of the equipment Working capital released Total cash flows (a) Discount factor (14%) (b) Present value of cash flows (a) x (b) Net present value ? 7 ? ? ? 7 ? 7 ? ? 7 7 ? 7 ? ? 7 *Use the formulas from Appendix 13B: Present value of $1 = 1/ (1+r)^n Present value of an annuity of $1 (1/r) (1- (1/(1+r)^n)) where n is the number of years and r is the discount rate