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Can someone just help me with the Profits column, please? By using NORM.INV and RAND. Thank you so much!!!! Universal Farm Supply's management is still
Can someone just help me with the Profits column, please? By using NORM.INV and RAND. Thank you so much!!!!
Universal Farm Supply's management is still considering the project from Q7, but they now realize that the price of fertilizer changes so much that there is no way to predict what the profit per pound will be in any particular year. However, by looking at past pricing data they see that the profit per pound looks like it follows a normal distribution with a mean of $0.03 and a standard deviation of $0.04. Set up the cash flow statement and calculate the NPV using NORM.INV and RAND to allow the annual profits to be drawn randomly from the specified normal distribution (8 points total). Cost Salvage Value Life Depreciation Price to Sell Change in NWC Sales Increase Profit per Pound Average Profit per Pound Std Dev Tax Rate Required Return Forklift Warehouse 72,000 149,000 103,000 7 10 10,286 X 4,600 37,000 7,000 500,000 0.03 0.04 20% 17% Year 0 1 2 3 4 5 One Time CF Profits Depreciation Taxes After Tax CFS X (228,000.00) (228,000.00) =NORM.INV(RANDO). (2,977.14) (2,977.14) NORM. INV(probability, mean, standard_dev) 77.14) X (2,977.14) 14,885.71 (2,977.14) Y (2,977.14) 14,885.71 (2,977.14) (2,977.14) 14,885.71 (2,977.14) (2,977.14) 14,885.71 (2,977.14) X (2,977.14) 14,885.71 (2,977.14) Y (2,977.14) 4,600.00 x (920.00) Y (920.00) 4,600.00 (920.00) (920.00) 44,000.00 4,600.00 X (14,120.00) 29,880.00 (228,000.00) (2,544.57) (2,174.84) (1,858.84) (1,588.75) (1,357.91) (1,160.61) (1991.97) (262.00) (223.93) 6,216.16 6 7 8 9 10Step by Step Solution
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