Apache Airlines, a privately held firm, is looking to buy additional gates at its home airport for $800,000 Apache has $240,000 in the bank but that money may not be spent as it is used to pay salaries, suppliers, and equipment Apache asked its bank for a loan but the bank refused saying that Apache's interest-bearing debt to equity was too high at 3.1 The bank said that Apache needed to lower that ratio below 2.3 in order to get the loan Separately, SkyBlue Airlines has approached Apache to see if Apache will buy it.

1. Aside from the purchase price, the gates will require a working capital infusion at purchase of $300,000 Apache estimates the gates will generate cash flows of $265,000/year for the next 8 years After that, the gates will revert back to the airport operator You must calculate the NPV and IRR of the gates. Apache's interest-bearing debt to equity rate is 3.1%

Please show excel equation used

	Start	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8
Investment
Working Capital
Operating Cash Flow
Total Cash Flow
NPV
IRR
Note: Show all numbers in thousand dollars.