Calculate the projected net present value of your proposed capacity expansion strategy. Use the attached file.

Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Forecast Sales 280,000 350,000 420,000 490,000 550,000 600,000 645,000 695,000 Gross Margin 84,000 105,000 126,000 147,000 165,000 180,000 193,500 208,500 Option 1 Capacity 400,000 400,000 600,000 600,000 600,000 600,000 800,000 800,000 Option 2 Capacity 400,000 400,000 800,000 800,000 800,000 800,000 800,000 800,000 Option 1 Investment Option 2 investment 350,000 Option 1 Option 2 Profit (GM- Profit (GMinvest) invest) 300,000 -266,000 -216,000 100,000 300,000 100,000 NPV= Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Forecast Sales 280,000 350,000 420,000 490,000 550,000 600,000 645,000 695,000 Gross Margin 84,000 105,000 126,000 147,000 165,000 180,000 193,500 208,500 Option 1 Capacity 400,000 400,000 600,000 600,000 600,000 600,000 800,000 800,000 Option 3 Capacity 280,000 400,000 600,000 600,000 600,000 800,000 800,000 800,000 Option 1 Investment Option 3 investment 350,000 100,000 350,000 100,000 100,000 Option 1 Option 3 Profit (GM- Profit (GMinvest) invest) -266,000 84,000 100,000 NPV= Forcast Sales = provided in problem Gross Margin = 30% of sales (calculated fromgiven information) Capacity is provided for each option. To figure NPV, first find the profit by subtracting the investement amount from the Gross Margin. When no investment is specified use 0. Then use the npv function in excel assuming a 15% discoount rate. NPV(15%,h2,h9)