Because capital budgeting requires numerous repetitive cash flows, it is an ideal application for Excel. When doing a capital budgeting problem, as in most Excel uses, you should do few or no calculations on your own, but rather let Excel do the calculations for you. We will begin with the shark attractant project. We have the following projections for the project: Cans sold per year: 50,000 Price per can: $ 4.00 Variable cost per can: $ 2.50 Required return: 20% Fixed costs per year: $ 12,000 Manufacturing equipment: $ 90,000 Project life (years): 3 Initial net working capital: $ 20,000 Tax rate: 34% Sales Price $40,000 Book Value at Year 3 $0 With these numbers, we can prepare the pro forma income statement. Use straight-line depreciation. Sales Variable costs Fixed costs Depreciation EBIT Taxes (34%) Net income